Parsons told ESPN.com he received the call from the Rockets just prior to 6 p.m. ET on Sunday informing him that they would not be matching the offer.
"I really appreciate the opportunity Houston gave me and I had three great years there," Parsons told ESPN.com, "but I am really excited for the next chapter of my career in Dallas -- to play with one of the greatest players in Dirk and a terrific owner in Mark Cuban."
Cuban was equally ecstatic to land Parsons, saying "Welcome to Dallas, Chandler Parsons!!!" via his Cyber Dust messaging app.
Sources close to the situation told ESPN.com that the Rockets tried Sunday to convince the Mavericks to mutually rescind Parsons' original offer sheet and re-do the deal as a sign-and-trade, which potentially could have created a lucrative trade exception for Houston. But the Mavericks, sources say, balked at those overtures, since the complicated transaction might have enabled Houston to salvage a valuable asset out of Parsons' exit.
In the end, Parsons will join the Mavericks based on the original terms of his offer sheet, which includes a player option after the second season to return to free agency if he chooses.
"The Mavericks are a smart organization. They obviously wanted to get him," Rockets general manager Daryl Morey told SportsTalk 790 in Houston on Monday. "That structure of that [contract] is literally one of the most untradable structures that I've ever seen.
"That's why it came down to a bet of [James] Harden, [Dwight] Howard and Parsons being the final piece, because we would have had no ability to do anything after that. And Harden, Howard, Parsons could have been good enough. I think Parsons is a tremendous player and is going to keep getting better."
The contract was designed to be as difficult as possible for Houston to match. That's why it includes a 15 percent trade kicker and a player option for the third season. Had Parsons returned to Houston, which declined a team option to pay him $965,000 next season to make him available in restricted free agency, the Rockets also could not have traded him without his permission this season due to restricted free-agency rules.
Houston would not have been able to bid on a star free agent next summer with Howard, Harden and Parsons combining to count more than $53 million against the Rockets' salary cap. Morey opted to replace Parsons with a less expensive option, signing small forward Trevor Ariza to a four-year, $32 million deal, and maintain the Rockets' flexibility in the future.
"The question is, is it better with that core or is it better with Ariza, plus the hundreds of moves that might be able to upgrade us in the other scenario. And there's really no moving -- that core was going to be the core that we had to have, because if we ever wanted to move off and go after the other stars, if we ever wanted to go after a different core, it wasn't going to be possible," Morey told SportsTalk 790.