Matthews spent the past three-and-a-half seasons with the Dallas Mavericks before being dealt to the Knicks as part of the Kristaps Porzingis trade on Jan. 31. New York waived the 32-year-old on Thursday.
In 44 games (all starts) with the Mavericks prior to the trade, Matthews averaged 12.8 points, 2.3 rebounds, and 2.3 assists. He's a career 38.2 percent 3-point shooter and is tenacious on the defensive end, earning a reputation as a prototypical role player on the wing.
"We're excited to welcome Wesley to the Pacers," team president Kevin Pritchard said. "He's a solid professional who we feel strongly will help us the remainder of the season and into the playoffs. When we looked at possible players to bring in, he fit in well with what we are trying to accomplish here on the court, in the locker room, and off the court."
The Pacers lost four straight games after All-Star guard Victor Oladipo ruptured his quad tendon in January. Their fortunes have changed dramatically in recent days, however. Indiana currently boasts a five-game winning streak, lifting the team to a 37-19 record and the No. 3 seed in the Eastern Conference.