The NBA will stage its first in-season tournament during 2023-24, with the finals to be played in Las Vegas.
Teams will play four group games in November to decide who goes through to the quarter-finals.
The format will then replicate the NCAA's hugely popular Final Four, with the semi-finals and final being played at the same venue in December.
"What a perfect opportunity for a global league like the NBA," said commissioner Adam Silver.
"It's a perfect tournament fit for our game."
Silver said that the new tournament was based on European football club cup competitions, such as the Champions League.
He confirmed details of the tournament on Saturday in Las Vegas.
The new in-season tournament is part of the NBA's new collective bargaining agreement with the National Basketball Players Association, which took effect on 1 July and runs to the end of 2029-30.
