Wade, who agreed to a contract buyout with the Chicago Bulls on Sunday, will be a unrestricted free agent and will sign a one-year, $2.3 million veterans minimum deal to reunite with LeBron James, league sources said.
Wade's relationship with James, cemented during four seasons and two NBA titles together with the Heat, pushed the Cavaliers past the Oklahoma City Thunder, San Antonio Spurs and Miami in pursuit of Wade.
Wade, a three-time NBA champion and MVP of the 2006 NBA Finals, will join a formidable Cavaliers roster with James, Kevin Love, JR Smith and Tristan Thompson. The Cavs will be without injured All-Star point guard Isaiah Thomas until at least January.
The team will initially cut a nonguaranteed training camp invitee to make room for Wade on the 20-man training camp roster, a Cavs source told ESPN. It will need to make an additional move beyond that to make space for him on the 15-man regular-season roster.
Cavaliers coach Tyronn Lue said it will be a challenge with all the new players added to the Cavaliers' roster this offseason, but he and his players are up for it.
"Anytime you get new pieces and new players, it's always challenging, but I'm up for the challenge, and so are the players," he said. "We will figure it out. It will be a good year for us."
Thompson said he expects Wade will fit in well.
"He's pretty familiar with most of the guys on our team, whether playing against or playing with," he said. "I think he's going to jell pretty well. He's a veteran. He's always been a good locker room guy. We've never heard anything bad.
"It would be great for our team to have another championship-mentality player on our team. It's just more pieces to the puzzle."
Wade averaged 18 points for the Bulls last season. In 14 seasons, he has averaged 23.3 points, 5.7 assists and 4.8 rebounds a game.
Wade, 35, gave back $8 million of his $23.8 million 2017-18 salary to reach a buyout agreement with the Bulls, league sources said.
ESPN's Dave McMenamin contributed to this report.