The team announced the move Saturday.
The 6-foot-3 Brazilian averaged 13.3 points, 2.1 assists and 24.1 minutes in 58 games last season, his first in Toronto.
Barbosa made $7.1 million last season and was second on the team in 3-point shooting.
The 28-year-old is in his eighth year in the NBA. He won the Sixth Man of the Year award after playing the 2006-07 season for the Phoenix Suns.
