"He was signed by Detroit, put on waivers," Snow told Newsday. "We claimed him and he didn't report. Therefore, we had to suspend him and it's within our right to toll the contract."
Snow told Newsday that the team hadn't filed the request yet, but according to the paper, the Islanders have until July 1 to officially file with the league.
Both Nabokov's agent and NHL deputy commissioner told Newsday they were aware of the Islanders' plans.
Nabokov signed a one-year contract with the Detroit Red Wings in January after spending part of the season with SKA St. Petersburg of the Russian KHL.
However, the NHL's collective bargaining agreement states that anyone who plays in a professional league before signing an NHL contract must clear waivers.
Once he signed his one-year deal with the Red Wings, he became available to the Islanders.
When Nabokov refused to report to the Islanders, the team suspended him.
With three goalies in tow for the '11-12 season, the move would allow the Islanders to finally trade Nabokov. After the suspension, the team was unable to move him until the season ended.
"If we were to entertain something like that it would be after the playoffs," Snow told Newsday. "The phase we're in right now is that we just finished up our exit meetings and we have to go through scouts meeting and look at any avenue to make the team better."
In order to keep the former San Jose Shark active, the Islanders gave Nabokov permission to play for Russia in this year's world championships. However, a source told Newsday that the team did so only with Nabokov's written assurance that he would not file a grievance with the NHLPA over the extension of the contract.
Information from The Associated Press contributed to this report.