Powell's agent, Thaddeus Foucher, told the news to ESPN's Adrian Wojnarowski.
Powell had previously declined his $11.6 million player option for the 2021-22 season.
The 28-year-old is coming off the best year of his career, averaging 18.6 points in 69 games between the Toronto Raptors and Trail Blazers. He shot 41.1 percent from three-point range over the course of the season, including 43.9 percent with Toronto before the deadline trade.
He also averaged 1.2 steals per game while making an impact on both ends of the court.
The 2015 second-round pick was little more than a role player in his first four years in the NBA, averaging 7.1 points in 16.8 minutes per game mostly off the bench. He first stepped into the spotlight during the 2019 playoffs, helping the Raptors take home their first NBA title in franchise history.
Powell built off that success in the 2019-20 regular season, averaging 16.0 points per game to nearly double his production from the year before (8.6 PPG).
The 2020-21 campaign showed this wasn't a fluke, as he scored at a high rate for two teams while remaining efficient with a .618 true shooting percentage, per Basketball Reference.
The 6'3" guard will look to keep it going with the Trail Blazers, giving the team another quality scorer to take the pressure off Damian Lillard and CJ McCollum. It also provides some insurance with Lillard's future with the team uncertain.
Portland has been looking to take the next step toward contention, and Powell should be able to help the squad on its way there with his production and 73 games' worth of postseason experience.