Per Shams Charania of The Athletic and Stadium, Payne has agreed to a two-year deal with the Raptors.
Payne has bounced around in four NBA seasons since being drafted No. 14 overall by the Oklahoma City Thunder in 2015.
The Thunder shipped Payne to the Chicago Bulls in Feb. 2017 as part of a package for Taj Gibson, Doug McDermott and a second-round draft pick in 2018.
After missing the first 57 games in 2017-18 with a right foot injury, Payne showed promise down the stretch upon returning. The Murray State alum set career-highs with 8.8 points and 4.5 assists with a 38.5 three-point percentage in 25 games.
Payne finished last season with the Cleveland Cavaliers after being waived by the Bulls in January. He appeared in nine games for the Cavs, averaging 8.2 points and 2.6 assists per contest.
The Raptors are currently set at point guard with Kyle Lowry and Fred VanVleet. Payne could start this season in the G League, though he also gives the team options if they want to explore trade possibilities for Lowry and VanVleet before their contracts expire at the end of next season.