The Clippers did not disclose terms of the deal, but the Los Angeles Times reported it was a three-year contract worth $24 million.
Butler's signing was the highlight move on the first day NBA teams could acquire free agents or make trades. The moratorium on transactions was lifted, along with the lockout, Thursday when owners and players approved their recently negotiated 10-year collective bargaining agreement.
Butler, 31, started the first 29 games of last season with Dallas before suffering a knee injury that knocked him out for the rest of the campaign. He was on the sidelines while Dallas was winning 16-of-21 playoff games en route to the NBA title.
He has played 589 career games with Miami, the Los Angeles Lakers, Washington and Dallas, with averages of 16.6 points and 5.9 rebounds per game. He has been an all-star twice.
In other action around the league Friday:
-- Forward Jamaal Magloire, an 11-year veteran, became the first Canadian to sign with Toronto in the franchise's history. He has played with five other teams in 646 career games.
-- Philadelphia re-signed forward Thaddeus Young, who was the 12th overall draft pick in 2007.
-- Oft-injured center Greg Oden agreed to a one-year deal with Portland. Oden has not played in an NBA game since fracturing his left patella two years ago. He has played in only 82 out of a possible 328 games with the Trail Blazers.
-- Cleveland signed guard Kyrie Irving and forward Tristan Thompson, the Nos. 1 and 4 picks in this year's draft. Irving averaged 17.5 points a game last season as a freshman at Duke, but missed most of the campaign with a toe injury.