The deal has been agreed to in principle and is expected to be finalized Thursday, according to sources.
Sources said the Suns will also receive the 46th pick in Thursday's NBA draft and $500,000.
The trade gives the Cavs a player they've coveted since February. With center Zydrunas Ilgauskas starting to break down, adding Shaq to the roster gives them a dominant force in the middle.
O'Neal averaged 17.8 points and 8.4 rebounds per game last season and made his 15th All-Star Game.
Maybe now LeBron can retire those dumb shirts.