Reporter Tim MacMahon broke the news about Carlisle's hiring on Thursday morning. He's expected to sign a 4-year, $29 million contract.
Carlisle is no stranger to the Pacers. He started with the team as an assistant coach under Larry Bird from 1997 to 2000. He became the head coach in 2003 after a brief stint with the Detroit Pistons.
He went 181-147 during the four seasons he led the Pacers.
The new coaching job comes after Carlisle announced last week that he was leaving the Dallas Mavericks after 13 seasons. He departed with two years left on his Dallas contract but he leaves the Mavericks on good terms.
Carlisle is the winningest coach in Mavs history and led the team to their own NBA championship in 2011.
He's now taking the reins from Bjorkgren, who was let go after the Pacers missed the playoffs after his first season as head coach.