The 40-year-old point guard is heading into his third year with the team, earning $9.7 million for the 2014-15 season.
Had the Lakers waived Nash prior to September, they would have been able to stretch his salary over the next three years at around $3.2 million annually.
Nash was acquired by the Lakers in a sign-and-trade with the Phoenix Suns in 2012, but he suffered a fractured knee in his second game with the team and has struggled to stay healthy since, with related problems in his back and hamstring. He managed to play through just 15 games in 2013-14, averaging 6.8 points and 5.7 assists.
While Nash is currently healthy, it remains to be seen if he'll be able to play through the final year of his contract. The Lakers acquired point guard Jeremy Lin over the off-season, who may start at the position or come off the bench if Nash is capable.
The Lakers went under the NBA's salary cap ($63.1 million) this off-season for the first time since 1996. The space was used to acquire Lin and re-sign Nick Young to a four-year, $21.3-million contract. The Lakers also used their cap room to claim Carlos Boozer off amnesty waivers from the Chicago Bulls.
The team considered increasing its spending power by stretching Nash's salary, but when its top free-agent targets (LeBron James, Carmelo Anthony and Chris Bosh) signed elsewhere, the Lakers chose instead to protect their cap space over the next two summers — sticking with the NBA's oldest player for a final season.
The Lakers are now over the cap with $67.9 million guaranteed to 13 players.