Adrian Wojnarowski of ESPN reported the agreement.
The 30-year-old had his best season as an NBA player in 2018-19, averaging 18.0 points and 4.1 rebounds while shooting 49.7 percent from the field and 42.5 percent from three—all career highs.
Bogdanovic became the team's leading scorer after Victor Oladipo was lost for the season with a ruptured quad tendon in his right knee in January.
His growing offensive impact, perimeter shooting and size on the wing made him a fascinating target for teams, especially in the modern NBA game, which is predicated heavily on floor spacing and perimeter shooting.
It seemed likely Indiana would retain Bogdanovic, given his excellent run with the team over the past two seasons.
"Bojan had an unbelievable year," team president Kevin Pritchard said in early May, per Akeem Glaspie of the Indianapolis Star. "When we signed him two years ago, the thought of him being a starter on a 48-win team, a starter that has played against some of the best teams and competed at a very high level in the playoffs—we would like to have extensive talks with Bojan."
But the Croatian player decided to test the market instead and landed with the Jazz.
His signing won't be one of the marquee moves in an offseason that saw some of the biggest names in the NBA hit free agency, but his addition was an excellent piece of business for Utah.
Indeed, the Jazz are having an impressive offseason. The addition of veteran point guard Mike Conley was a fantastic start, but adding a floor-spacing sharpshooter to the mix will perfectly complement the trio of Rudy Gobert, Donovan Mitchell and Conley.
With all of the buzz surrounding the free agency of Kawhi Leonard, Kevin Durant and some of the league's other stars, the Jazz have quietly built themselves into a legitimate contender next season. Utah fans should be thrilled with the team's offseason.