Marion, 36, has yet to formally agree with the Cavaliers on a deal, but that could come soon, league sources told Yahoo Sports.
The Indiana Pacers wanted to pursue Marion as a short-term replacement for injured forward Paul George, and will likely soon be armed with a $5.3 million disabled player exception that would allow them to trump the Cavaliers' offer of the veteran minimum of $1.4 million per season.
The Pacers are applying for the exception in the wake of George's broken leg, sources said. Nevertheless, Indiana has started to move on from Marion, believing he's headed to the Cavaliers, and search elsewhere for a free agent, league sources told Yahoo Sports.
David Aldridge of NBA.com first reported the Pacers' plans to apply.
Marion, a four-time All-Star, made a visit to Cleveland on Monday to meet with Cavaliers officials. He averaged 10.4 points and 6.5 rebounds for the Mavericks last season. In 15 NBA seasons, Marion has averaged 15.8 points and nine rebounds.
Free-agent guard Chauncey Billups worked out for the Cleveland Cavaliers on Wednesday, but has not received a contract offer, league sources told Yahoo Sports' Marc Spears.
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