Marion, 36, reportedly wants to play alongside star forward LeBron James and have a chance to compete for an NBA title. The Indiana Pacers are also pursuing Marion after losing forward Paul George to a broken leg that will keep him out for about a year.
The Cavaliers can only offer Marion $1.4 million this season.
The Pacers could pay Marion up to $5.3 million after being granted a disabled player exception by the NBA stemming from George's injury. However, they would enter into luxury tax territory if they spent more than $1.7 million of the exception.
Indiana could outbid Cleveland for Marion without going over the luxury tax. Pacers president Larry Bird has said the Pacers will not be a luxury tax team.
Marion has reportedly said he wants to play for a championship contender if he leaves the Dallas Mavericks. He has met with the Pacers and Cavaliers.
Last season, Marion averaged 10.4 points and 6.5 rebounds for the Mavericks. In 15 NBA seasons with the Phoenix Suns, Miami Heat, Toronto Raptors and Mavericks, he has averaged 15.8 points and 9.0 rebounds per contest.