Gus Takkale, co-owner of the Ottawa TomaHawks, said the team would be renamed "to do the right thing for the community," the Canadian Broadcasting Corp. reported Wednesday.
The team's logo doesn't feature a tomahawk but depicts a basketball with wings.
Takkale had defended the choice of team name following outcries from the area's aboriginal community. He said the name didn't refer to an ax but to a type of slam dunk in basketball.
Ian Campeau, an Ottawa aboriginal, had criticized the name on Monday as "backward," saying "it sets Ottawa back almost 30 years."
On Wednesday, he applauded Takkale's announcement of the change, saying it showed leadership.
Takkale didn't indicate what the team's new name would be.
The team is part of the National Basketball League of Canada whose first next season starts in November.
'How to Train Your Dragon 2' releases 5-minute clip
Lytro unveils camera that can focus a photo after shooting it