McCaw reportedly agreed to a two-year deal, league sources told The Athletic's Blake Murphy.
"Patrick is a multi-dimensional player who brings a lot of skills to our team and can play a variety of positions," said Raptors general manager Bobby Webster in a statement. "We’re really glad to have him back."
Waived by the Cleveland Cavaliers following his trade from the Golden State Warriors in January, McCaw joined the Raptors and played in 26 regular-season and 11 postseason games.
McCaw, 23, has averaged 3.7 points over 157 NBA games and has won a championship in each of his three seasons in the league.