The Spurs announced the move Friday without disclosing terms.
The 6-foot Australian was signed by the Spurs on March 27. He played in 16 games, three of them starts, and averaged 10.3 points, 2.4 assists and 1.8 rebounds in 16.3 minutes.
He set career-highs for points and assists in his final two games of the regular season. On April 25, he got a career-best 27 points at Phoenix and then surpassed that the following night in Golden State by scoring 34 points and getting a career-high 12 assists.
Mills spent part of last season playing in Australia and China. He was originally drafted by the Portland Trail Blazers in 2009.