Chandler, 36, will be a backup to starting center JaVale McGee for the Lakers, who are desperate for an infusion of size and defensive rebounding.
"We love the fact that we're going to get another veteran," Lakers star LeBron James said. "A guy who plays hard, a guy who's very smart and another champion to add to the champions that we have in this system here today, and it adds depth in our frontcourt, which we have had trouble with at times."
Chandler is a native of Los Angeles, and he has been anxious to find a new home amid the Suns' rebuild. The sides agreed to a buyout on the $13.6 million left in the final year of his original four-year deal, sources said.
The prorated minimum for Chandler once he clears waivers will be $2.1 million. The Lakers will have a $1.3 million cap hit on the books.
Chandler is considered one of the strong, veteran leaders in the league, and he will be a welcome addition to a largely youthful Lakers locker room.
The New York Times first reported the buyout was in process.
The Lakers have been using rookie Johnathan Williams as a backup center, but he's on a two-way contract and limited to only 45 days in the NBA.
The early-season buyout is rare. The last player to receive one in November was Nemanja Nedovic by the Golden State Warriors in November 2014.
Chandler is in his 18th season after entering the NBA draft out of high school in 2001. His productivity has been on the decline in recent years. He averaged 6.5 points and 9.1 rebounds in 46 starts for the Suns during the 2017-18 campaign.
Information from ESPN's Bobby Marks was used in this report.