The value of the deal was not disclosed.
Day, who was selected by the New York Rangers in the third round of the 2016 NHL Draft, cleared unconditional waivers to terminate his contract with the team in May.
The 22-year-old was granted exceptional status to join the OHL at age 15. He's one of just seven players in CHL history to receive the honor. While he managed to put together a solid junior career, he wasn't able to make an immediate leap to the majors.
He's yet to play in an NHL game but has appeared in 62 career AHL games, amassing four goals and 18 points.