The Phoenix Suns are trading T.J. Warren and the No. 32 pick in Thursday's NBA draft to the Indiana Pacers, a league source told ESPN.

The Pacers will send cash to the Suns, according to a league source. Phoenix wanted to unload the three years and $35 million remaining on Warren's deal to create salary-cap space.

Warren averaged 18.0 points, 4.0 rebounds and 1.5 assists in 43 games this past season, when he improved his shooting dramatically. He shot 28% from 3-point range in his first four years in the league but improved to 43% last season, the eighth-best percentage in the NBA among players with at least 100 attempts.

The trade will not be finalized until July 6, when the Pacers will have cap room to absorb Warren. Indiana will still have close to $31 million in room after the trade, with point guard Ricky Rubio a significant free-agent target for the team, sources said.

Phoenix will have $21 million in space, which would increase to $29.5 million if the Suns decline to re-sign Kelly Oubre Jr., who is a restricted free agent.

ESPN's Bobby Marks contributed to this report.