Looks like it's a 2 years contract with a player option on the second year:
http://basketball.realgm.com/nba/free_agent_options
It's the logical contract to give at a player taking such a paycut. If he has some career ending injury, it would allow him to get $3M from Spurs.
Some side notes:
- It looks also like the 4th year of Green's contract is a player option.
- Spurs are $620K above the tax (without including Reggie Willaims non guaranteed contract). The only way to go under would be a midseason trade.
- Spurs made the choice to go over the tax by signing Bonner as 14th player. When you include his salary, the luxury tax and the tax redistribution, it's a signing that cost Spurs' owner $5M.
- Adding a vet as 15th player with an one year min salary would cost $2.5M to Spurs.