According to sources, Felton's new pact is a one-year deal at the veteran's minimum.
The 33-year-old veteran averaged 6.7 points and 2.4 assists as a member of the LA Clippers during the 2016-17 season.
The Thunder are bringing Felton in to serve as a viable backup to MVP Russell Westbrook. Oklahoma City's production dipped dramatically when Westbrook went to the bench last season.
Sources said Felton sought teams in contention for which he would have an opportunity to make an impact from game to game.
Felton also has played for Charlotte, New York, Denver, Portland and Dallas throughout his 12-year career.