Paul George’s camp has informed the Pacers that the four-time All-Star intends to leave in the summer of 2018 when he becomes a free agent, sources told AP on Sunday night.

George has spent all seven of his NBA seasons in Indiana, emerging as one of the league’s top players. He averaged a career-high 23.7 points and shot 46% last season, but the seventh-seeded Pacers were swept by Cleveland in the first round of the Eastern Conference playoffs. The steady decline in competitiveness of the franchise, and LeBron James’ dominance of the conference, has led George to look elsewhere as he nears free agency next summer.

The Pacers’ chances of keeping George also took a big hit when he was not voted to one of the three All-NBA teams after this season. Had he been voted in, George would have qualified for a super-max contract worth about $210m over five years, a staggering sum that may have been too much to turn down. Instead, the Pacers are able to offer him around $177m.

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George’s declaration puts the Pacers on the spot. They can either try to trade him this summer in hopes of getting a package of players and draft picks that can at least help them try to make up for the loss of a foundational star, or they can try to keep him for this season, make some other moves around him to improve the roster and hope they can change his mind.

It’s a test for Kevin Pritchard, who took over as the chief decision-maker in the Pacers front office after Larry Bird abruptly stepped down after the season concluded. Pritchard is well-respected across the league and has considerable experience from his time running the show in Portland. He also spent several years under Bird in Indiana, which gives him the familiarity of the roster and George to make an informed decision.

Complicating matters is the widely held belief across the league that George wants to return to his native California to play for the Los Angeles Lakers. That means any team other than the Lakers that makes a play for George this summer runs the risk of giving up considerable assets for a one-year rental. That could force the Pacers to push their asking price down after resisting significant offers from the Boston Celtics at the trade deadline in February.

Yahoo Sports first reported that George’s camp made his feelings known to the Pacers on Sunday.

Word of George’s intentions spread quickly across the league and is sure to solicit inquiries. A player of George’s caliber — dynamic and versatile on offense and accomplished on defense — can be a game-changer for several teams trying to find a way to stay competitive with the star-studded Golden State Warriors.

The Warriors just won their second championship in three seasons, and their addition of Kevin Durant last summer gave them four All-Stars on a super team that showed few weaknesses while going 16-1 in the playoffs.

With his ability to play multiple positions, defend and shoot the 3-pointer, George is just the kind of player who could give the Warriors fits. So teams near the top like the Cleveland Cavaliers, who have faced the Warriors each of the last three seasons in the NBA finals, could see adding him as the missing piece to being able to match up across the board.

The risk any team takes is losing him after one season. But the Cavaliers have walked out on that limb before, trading No1 overall pick Andrew Wiggins to Minnesota in 2014 so they could land All-Star Kevin Love, another player many thought was destined to head to California when he became a free agent. Love teamed with James and Kyrie Irving to help the Cavs reach three straight finals and signed a five-year, $110m maximum contract to remain in Cleveland in 2015.

The Pacers could still roll the dice and try to convince George to remain with the only team for which he has played. Just last week, at his celebrity softball game, George told reporters that “I’m under contract as a Pacer. That’s all that needs to really be known. I’m here. I’m a Pacer. Again, what I’ve been dealing with is stories. You guys talking or teams talking. I’m a Pacer. There’s no way around that. This is my team, my group and this is where I’m at.”