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The deal is reportedly for one year and $4 million.
Stephenson, 28, is 6-foot-6 and spent last season with the Los Angeles Lakers. He garnered little interest among NBA teams in free agency.
He averaged 7.2 points and 3.8 rebounds in 68 appearances last season. He became the odd man out as the Lakers reshaped their roster, adding the likes of Anthony Davis, Danny Green and DeMarcus Cousins, as well as Jared Dudley and Avery Bradley.
The well-traveled Stephenson has also played for the Charlotte Hornets, Minnesota Timberwolves, New Orleans Pelicans and Los Angeles Clippers, and served two stints with the Indiana Pacers.