Yahoo! Sports' Adrian Wojnarowski first reported the news.
Ilyasova averaged 11.5 points per game in 58 games for the Bucks last season, his fourth campaign in a row in double figures.
The 35-year-old Butler, a two-time all-star, scored only 5.9 points on 40.7% shooting for the Pistons in 2014-15. He has played for eight NBA teams, including the Bucks during the first half of 2013-14. Butler is a native of Wisconsin.
Williams split last season between the Miami Heat and Detroit Piston, averaging 5.4 points per game on 40.3% shooting.
Milwaukee drafted Ilyasova in the second round of the 2005 draft. He played for the Bucks in 2006-07, then played in Spain for two seasons before returning to Milwaukee. He was the longest tenured player on the Bucks roster prior to the trade.
According to Wojnarowski, the Bucks made the trade to clear cap space. Ilyasova is set to earn $7.9 million next year. Butler has a team option for 2014-15, and Williams is owed only $1.356 million.
- Alex Putterman