Michigan State Coach Tom Izzo suspended the point guard after 18 games this season for unspecified team rule violations.
"Korie is an accomplished point guard with valuable experience playing at the highest level," Hoiberg said. "He is a point guard that can run a team, make plays, and score in both transition and in the half-court."
"It's the best playing opportunity for me to get to where I eventually want to go," Lucious told The Des Moines Register. "Coach Hoiberg has connections -- a lot of connections -- to the NBA."
Lucious will have one year of college eligibility remaining after he sits out the 2011-12 season due to NCAA transferring rules.
He averaged 6.5 points and 4.1 assists this season for Michigan State and played a key role for the Spartans in last year's NCAA Final Four.