Terms of the contract with the free agent were not announced. The move comes after Lawson was bought out by the Houston Rockets last week.
The Pacers requested waivers for forward Chase Budinger on Saturday to create a roster spot for Lawson. The team reached a buyout agreement with Budinger that was finalized Friday night.
The 5-foot-11, 195-pound Lawson is in his seventh year in the NBA. He played his first six seasons with the Denver Nuggets before Houston acquired him last summer. He averaged 5.8 points per game and 3.4 assists with the Rockets in 53 games this season before the Rockets waived him.
The Pacers (33-30) are currently seventh in the Eastern Conference standings as they hope to make a playoff run.
"We're glad to have Ty come play with the Pacers for this final run of the season," Pacers president of basketball operations Larry Bird said in a statement. "We think he brings added speed to our backcourt, he can get up and down the floor and he helps strengthen our second unit."
For his career, the 28-year-old Lawson has averaged 13.3 points and 5.8 assists per game. Lawson, who played collegiately at North Carolina, was a first-round pick (18th overall) in the 2009 NBA draft.
Lawson could play a backup role to guard George Hill.
"This is a good opportunity for me to come here, try to help the Pacers win and get into the playoffs," Lawson said. "I'm just ready to play and do whatever is needed."