Stephenson, 27, played the first four seasons of his career with the Pacers before joining the Charlotte Hornets in 2014.
"While I couldn't be more excited to join the Los Angeles Lakers, I first need to thank Pacer Nation for all of the love and support over the years," Stephenson wrote on social media.
"The entire organization stood by me through all of the ups and downs of my career and have played a crucial role in molding me into the man and player that I am today," Stephenson wrote. "I will forever be indebted for that unwavering belief in me."
Stephenson averaged 9.2 points, 5.2 rebounds and 2.9 assists lin 82 games last season. He made seven starts. His best full season with one team came during the 2013-2014 campaign, when he posted 13.8 points, 7.2 rebounds and 4.6 assists in 78 starts for the Pacers.