The deal is worth $42 million, Charania added.
San Antonio tends not to play the free-agent game, but clearly that has changed and McDermott is coming off arguably his best season as a pro — averaging 13.6 points and 3.3 rebounds. He is career 41 percet shooter on 3-pointers.
McDermott, 29, is 6-foot-7 and shot 53 percet in 66 games this past season. He had also been linked to the Cavaliers and Pelicans, and had indicated he was open to a return to the Pacers.
But Indiana figured McDermott has priced himself out of its range, per reports, and that theory proved to be correct.