The Pacers also announced Wednesday they have dealt Troy Murphy to the Nets, who sent guard Courtney Lee to Houston. To complete the trade, the Rockets shipped swingman Trevor Ariza to New Orleans.
Indiana was searching for a point guard since T.J. Ford fell out of favor last season with coach Jim O'Brien. The Pacers get a good, young one in Collison, who played well when Chris Paul was injured.
"He's a dynamic young point guard and we believe that he will be a key piece of our goal of building a team that the fans in Indiana deserve," team president Larry Bird said in a statement.
The cash-strapped Hornets were able to move the remaining two years and more than $13 million remaining on Posey's contract.
The Nets get a good rebounder in the 6-foot-11 Murphy, a New Jersey product who is an excellent outside shooter for his size. The former first-round pick from Notre Dame is a career 39 percent shooter from 3-point range.
"We are very pleased to add Troy to our roster," Nets general manager Billy King. "He is a quality power forward who has the ability to stretch the floor, and we feel that he will be a very positive addition to our frontcourt rotation."
Lee and Ariza are both on the move again after brief stints with their teams. The Nets acquired Lee from Orlando on draft night in 2009 in the Vince Carter deal, while Ariza joined the Rockets as a free agent after helping the Lakers to that season's NBA championship.