Nwaba entered the offseason as a restricted free agent, but the Bulls have now allowed him to become an unrestricted free agent.
They also made official a move that has been reported for weeks, waiving Sean Kilpatrick.
The Bulls are on the cusp of either signing a wing or absorbing a bad contract with an asset attached.
Both Lakers and Spurs are looking to re-assemble their bench after some of their restricted free agents left town, making Nwaba a potentially welcome addition.
While there is no clear frontrunner, the Bulls could still re-sign him, but likely prefer to stay out of a bidding war after matching the Sacramento Kings' offer sheet for Zach LaVine for a hefty $78 million over four years.
Nwaba, claimed after the Lakers placed him on waivers last summer, averaged 7.9 points and 4.7 rebounds in 70 games last season, including 21 starts. He also shot 43.9 percent from the field and 39.6 percent from the perimeter.