The deal, which includes a future first- and second-round pick, allowed Toronto to offload the remaining two years and US$30 million of Carroll’s salary.
Toronto gets centre Justin Hamilton in return, though its unclear if he has any future with the team.
The Raptors needed to shed some salary after re-signing all-star point guard Kyle Lowry to a three-year, $100 million deal and forward/centre Serge Ibaka to a three-year, $65 million contract.
Carroll was coming off a disappointing season in which he averaged 8.9 points on 34 per cent shooting in 72 games.
With the Carroll trade complete, the Raptors can finalize a reported deal that would send point guard Cory Joseph to Indiana for C.J. Miles.
The 30-year-old Miles is coming off one of the best seasons of his career, shooting 41 per cent from three-point range.