The pick is top-55-protected, meaning it is likely never to convey, sources told ESPN.
The Rockets are taking on Porter, a 6-foot-4 wing who was the 30th overall pick in the 2019 draft, as a reclamation project after personal issues have prevented him from playing this season. Porter, 20, averaged 10.0 points, 3.2 rebounds and 2.2 assists during a promising rookie year last season.
Sources told ESPN's Brian Windhorst that the Cavaliers decided to trade or waive Porter after he had a screaming match with team officials last Friday night, when he attended his first game of the season. Porter was upset that his locker had been moved to an auxiliary area after his old locker was given to Taurean Prince, who arrived along with Jarrett Allen in the four-team James Harden trade last week.
"After careful and thoughtful evaluation, we made the very difficult and collective decision to make this trade," Cavs GM Koby Altman said in a statement. "Given the culture and environment we have worked to cultivate here in Cleveland, we feel this move is in everyone's best interest.
"Kevin has a bright future ahead of him as a professional basketball player and, at his core, is a good person."
The Athletic first reported the incident with Porter.
Houston will release injured guard Chris Clemons (Achilles tendon) to create a roster spot for Porter, sources said.
The Cavaliers picked up a team option on Porter's contract last month, meaning he is owed $2.13 million for the 2021-22 season. He has another team option for $3.85 million for the 2022-23 season.
"Cleveland, thank you for giving me a chance to change not only my life but my family's as well, & believing in me," Porter said Friday in a post on Twitter. "To the beloved city, the fans, my brothers I gained, the coaching staff, and the entire organization, I appreciate you & won't ever take the relationships we have for granted. Everything we shared together was real, & it'll always be a foreva love."
The Rockets intend to have assistant coach John Lucas, who has helped several NBA and NFL players to overcome personal issues to have successful careers, work closely with Porter, a source said.
The Cavs have been protective when discussing Porter during the season. There had been a plan to hopefully reintegrate him to the roster, though he spent weeks away from his teammates, sources said. His returning to the sideline indicated a progression in that plan, as coach J.B. Bickerstaff told reporters Friday.
"Obviously seeing what we're doing, experiencing the games and those types of things will help him as he returns," Bickerstaff said. "We have a plan in place with KP. He's always been a part of the team, but we wanted him with the guys."
On Monday, Bickerstaff said the organization had done its best to help Porter.
"We all want to see Kevin be successful and I still feel that way, so whatever it is that happens in the future for him, I hope nothing but the best for him," Bickerstaff said. "It's part of our responsibility as coaches to give everyone our all and try to make the best of every situation, and I can say that we did that."
Porter was arrested on Nov. 15 after a middle-of-the-night crash when he flipped his Mercedes SUV. He admitted that he had been drinking earlier in the evening, and when police searched the car, they found a loaded handgun in the glove compartment and a small amount of marijuana.
A grand jury declined to indict Porter on a felony weapons charge after he was able to prove he didn't know the gun was in the car. Police also determined he was not impaired at the time of the accident. A judge dismissed the misdemeanor pot charge.
In October, Porter raised alarms when he posted a black square on his Instagram with the message "Do you ever wish to see the end of your time?" After Cavs officials and teammates reached out, Porter deleted his Instagram account.
He later posted a message on Twitter that read in part, "I'm fine. Been thru my worse times already, can't get worse than what I already been thru. Love & Thank you." That post was also later deleted.
The Cavs had traded up to draft Porter. Though he had been regarded as one of the most talented players in the draft, Porter slid after a rocky freshman year at USC when he was suspended at one point for conduct issues.
ESPN's Brian Windhorst contributed to this report.