Orlando waived Birch in order to give him an opportunity for more playing time elsewhere, sources told The Athletic's Shams Charania and Josh Robbins.
The Toronto Raptors are likely to be his next destination, Charania and Robbins report.
Birch, 28, is recording 5.3 points and 5.1 rebounds per game in his fourth season. He's mostly been deployed off the bench, making five starts over 48 appearances this year while playing 19.8 minutes per game.
He will clear waivers at 5 p.m. ET Saturday, according to ESPN's Bobby Marks, allowing him to sign with any team he chooses.
Players can be waived and remain eligible for the postseason until Friday, according to TSN's Josh Lewenberg. Toronto currently sits two games out of 10th place and the second play-in seed in the Eastern Conference.
Birch, a Montreal native, went undrafted in 2014 after playing in college with Pittsburgh and UNLV.
He's represented Canada in international competition, playing for the senior squad at the 2019 FIBA World Cup under Raptors head coach Nick Nurse while registering 11.6 points, seven rebounds, and 1.6 assists in five games.
Birch is set to become an unrestricted free agent after the season.