Portland will be the third expansion franchise the WNBA adds over the next two years, with Golden State and Toronto having previously been awarded teams.
The new team will be owned and operated by Raj Sports and led by Lisa Bhathal Merage and Alex Bhathal. It also marks the WNBA's return to Portland, which was home to the Portland Fire from 2000 to 2002.
"As the WNBA builds on a season of unprecedented growth, bringing a team back to Portland is another important step forward," WNBA commissioner Cathy Engelbert said in a media statement.
"Portland has been an epicentre of the women's sports movement and is home to a passionate community of basketball fans.
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