Douglas’ deal includes no guaranteed money, according to ESPN. He will compete in camp to earn a spot on the team as a backup behind Kyrie Irving.
The defending NBA champions were looking for another point guard after Mo Williams retired last week.
The 6-foot-2, 190-pound Douglas appeared in 61 games for the New Orleans Pelicans last season, averaging 8.7 points, 2.3 rebounds and 2.6 assists in 20.7 minutes per game. Douglas, 30, also has played with New York, Houston, Sacramento, Golden State and Miami in his seven-year NBA career, with averages of 7.8 points, 2.2 rebounds and 2.3 assists in 19.2 minutes per game.
Douglas, who was a teammate of LeBron James in Miami in 2013-14, was originally drafted by the Los Angeles Lakers with the 29th overall pick in the 2009 draft.
In a related move, the Cavs waived forward/center Eric Moreland. He signed a training camp deal last month.