The deal sends Martin back to the Islanders, where he spent the first seven seasons of his NHL career before signing with Toronto in 2016.
The 29-year-old has two years remaining on a contract that carries a $2.5-million cap hit.
McAdam, 23, had a .910 save percentage and 2.84 goals-against average with the ECHL’s Worcester Railers.
The Perkasie, Pa., native also appeared in nine games for AHL Bridgeport, posting a .903 save percentage and 2.77 goals-against average.
He was taken in the third round (70th overall) by the Islanders in the 2013 NHL Draft.
— New York Islanders (@NYIslanders) July 3, 2018
The Leafs now have six goalies signed for next season (Frederik Andersen, Curtis McElhinney, Calvin Pickard, Garret Sparks, and Kasimir Kaskisuo are the others).
Sportsnet’s Elliotte Friedman reported on July 27 that the team was taking calls on its AHL championship netminding duo of Sparks and Pickard.