Green is with the team in Boston and expected to sign his contract before Thursday’s game against the Celtics, league sources said.
The Rockets have until the NBA’s deadline of Jan. 7 to guarantee Green’s contract for the season, or waive him. At that time, Houston could waive Green but still sign him back on a series of 10-day contracts.
The Rockets, with the NBA’s second-best record at 25-7, will use Green as insurance for its backcourt depth.
Green, 31, was released at the end of training camp by the Milwaukee Bucks.
Green has had NBA stops with Boston, Minnesota, Houston, Dallas, Brooklyn, Indiana, Phoenix and Miami, as well as stints overseas. He was the No. 18 overall pick in the 2005 NBA draft out of Gulf Shores Academy in Houston. He won the NBA Slam Dunk Contest on All-Star Weekend in 2007.