Sources told ESPN The Magazine's Ric Bucher that the Pacers and the Raptors have agreed to a deal that, pending review of medical information, would send Jermaine O'Neal to Toronto in exchange for T.J. Ford, Rasho Nesterovic and the No. 17 pick in Thursday's NBA draft.
ESPN.com has also learned that the Raptors will get the 41st pick from the Pacers as part of the deal while the Pacers will receive Raptors forward Maceo Baston to complete the deal.
Ford's contract makes him a "base-year compensation" player, meaning the trade cannot be completed until July 9.
The agreement was first reported by Yahoo! Sports.
O'Neal had surgery in April 2007 to repair torn meniscus cartilage in his left knee. He came back to start this season but occasionally played through swelling and pain. Before the Pacers announced his most recent injury, O'Neal said the knee hadn't fully healed from the procedure.
O'Neal played in only 42 games last year and at one point missed 33 straight games before returning to the lineup on March 31. He had his worst season with the Pacers since 2000-01 as he averaged 13.6 ppg and 6.8 rpg after averaging 19.4 ppg and 9.6 rpg in 2006-07. Team officials recently told the Indianapolis Star that O'Neal, a six-time All-Star, and his knee are healthy.
He was the star of the Pacers team in 2003-04 that won 61 games and reached the Eastern Conference finals. But he was also involved in the Pacers-Pistons brawl at the Palace at Auburn Hills in 2004 that caused a meltdown of the Pacers that season and put the team in a funk from which it hasn't recovered. Since that 61-win season, the Pacers have missed the playoffs the past two years and haven't won more than 44 games in a season.
Ford has a history of neck injuries that began his rookie year. He collided with Minnesota's Mark Madsen on a drive to the basket on Feb. 24, 2004 and had to be carted off the court on a stretcher after injuring his tailbone. Ford missed the entire 2004-05 season and his backup, Mo Williams, emerged as a possible candidate for the starting job. Ford played in 72 games for Milwaukee in the 2005-06 season as the Bucks made the playoffs, but he was traded to Toronto after the season for the Bucks' Charlie Villanueva and cash.
In his first season with Toronto, Ford played in 75 games, averaging a career-high 14.0 ppg and 7.9 apg as the Raptors won the Atlantic Division for the first time in team history. Last season, Ford missed 13 games with a neck injury after Atlanta's Al Horford knocked him to the ground on a breakaway layup. Throughout the season, backup Jose Calderon proved more than adequate and took advantage of Ford's injury to land the role as the Raptors' favored starter.
Nesterovic averaged 7.8 ppg and 4.8 rpg last season, but went from a regular starter for Toronto in his first season to a backup last season.
O'Neal is set to make $21 million this season and $23 million in 2009-10. Ford has $25 million and three years left on his contract.
The Pacers will now hold the 11th and 17th picks in Thursday night's draft while the Raptors will not have any first-round selections.
Information from The Associated Press was used in this report.