Terms weren't immediately available.
Iwakuma had been with the Seattle Mariners. He became just the second Japanese-born pitcher after Hideo Nomo to throw a no-hitter in the U.S. major leagues, which ended a run of 12 straight no-hitters thrown by National League pitchers, when he silenced the Baltimore Orioles in a 3-0 Mariners win in August.
Talented but often injured since he arrived from Japan in 2012, the 34-year-old Iwakuma, a native of Tokyo, had pitched more than eight innings only twice in his career before throwing the fourth individual no-no in franchise history. He had never pitched a complete game.
He spent two-and-a-half months on the disabled list after straining a muscle in his back and side in late April, another in a series of injuries that has made his career in the majors go in fits and starts.
However, he was solid after returning, and there were rumblings around the trade deadline that Iwakuma might be moved. He gained momentum with an 8-4 second half of the 2015 season to finish 15-9 with a 3.52 ERA in 28 starts. In 91 career games with Seattle, Iwakuma is 38-20 with a 3.07 ERA.
The Dodgers were looking for rotation help after Greinke agreed to what sources said is a six-year, $206 million deal with the Arizona Diamondbacks.