The deal will save the Devils US$3.6 million on their cap - Malakhov's salary - and it probably won't cost New Jersey much because Korolyuk will play in Russia again this season and Fahey might not make the roster.
With the NHL season scheduled to open this week, Devils president and general manager Lou Lamoriello has been desperate to make some moves to get under the NHL's $44 million salary cap.
Lamoriello would not say whether the Devils will have to make more moves before the season opens on Friday in Carolina against the Stanley Cup champion Hurricanes.
However, he still has to sign right wing Brian Gionta, who scored a team-record 48 goals last season, defenceman Paul Martin, and backup goaltender Scott Clemmensen. So there might be another deal in the works.
"We'll take it one thing at a time," Lamoriello said in a telephone call from his office in East Rutherford, N.J.
The Devils were pushed over the cap limit this summer when they signed forward Patrik Elias to a seven-year, $42 million contract - a $7.5 million contract this season - and centre Scott Gomez was awarded $5 million by an arbitrator.
The Devils, who also signed Jamie Langenbrunner in the off-season, also owed Malakhov and forward Alexander Mogilny some $7.1 million this season, even though they will not be on the team. They were signed as free agents last season, but they were dropped from the roster for poor play.
Mogilny was sent to the minors, and Malakhov first retired and then was suspended by the team.
Since they were both over 35-years-old when they signed last year, their salaries counted against the Devils' salary cap.
Lamoriello has petitioned the NHL to have Mogilny's salary removed from the cap because of a long-term hip injury.
The 30-year-old Korolyuk had 19 goals and 15 assists in 45 games for Vityaz Chekhov in Russia. He last played in the NHL for the Sharks in 2003-04.
"We're getting an exceptional hockey player who could play for us next year," said Lamoriello, who refused to reveal the conditions placed on the first-round pick sent to the Sharks.
Fahey appeared in 21 games for the Sharks last season and had two assists.
"We'll have to take a look at him," Lamoriello said of Fahey.
The 38-year-old Malakhov had four goals and five assists in 29 games with the Devils. He has played in 712 NHL games with the New York Islanders, Montreal, New Jersey, the New York Rangers and Philadelphia.