James sustained the injury during Miami's 103-81 road win over Oklahoma City on Thursday. The four-time MVP was originally listed as a game-time decision for Sunday but Heat coach Erik Spoelstra ruled James out prior to tip off.
Greg Oden will get the starting nod in James' place, marking the oft-injured center's first start since Dec. 5, 2009.
On the play, James attacked the paint from the left angle, driving hard to his right to gain a step on Ibaka. Rising in the paint, he climbed the ladder over the top of Ibaka to finish a "throw dunk" before he appeared to absorb a hand to the face from Ibaka during his follow-through.
James immediately fell to the court on the baseline and looked face down at the hardwood as the blood poured. Play stopped shortly thereafter and he was attended to by his teammates and medical staffers.
"He’s got a swollen nose right now," Spoelstra said after the game, adding that James passed a concussion test. "It’s sore. We’ll reevaluate him when we get back to Miami.”
Although James did not address reporters after the game, he joked on Twitter that he might have to wear a mask like Bane, the villain in Batman.
James has played in 52 of the Heat's 53 games this season. He sat out a December game against the Blazers in Portland with a minor groin strain. Miami improved to 39-14 with the victory over Oklahoma City. The Heat's next game comes on Thursday when they play host to the Knicks.