The team later confirmed the move in a press release, making it official.
Indiana reportedly intends to re-sign forward James Johnson, waived by the team at the trade deadline.
Ibaka was acquired as part of a trade with the Bucks and Nets, in which the Pacers also landed forward Jordan Nwora and guard George Hill. Ibaka, 33, had been sitting out with the Bucks as the team searched for a trade.
Ibaka was acquired by the Bucks as part of a multi-team deal involving the Clippers at the trade deadline last season. He has also spent time with the Thunder, Magic and Raptors after being drafted by the old Seattle SuperSonics (now Thunder) with the No. 24 overall pick in the 2008 NBA Draft.
He is said to be drawing interest from the Celtics, Clippers and a few others.