This system of challenges has been tested in the G league the past 2 years, and experimented with in the NBA summer league of 2019, with a formal vote of approval made on tuesday.
Sources: Head coach’s challenge won’t be a physical flag thrown on the field of play like the NFL — it will be a signal from the coach. https://t.co/4wtdzw2FpN— Shams Charania (@ShamsCharania) July 10, 2019
Similar to the NFL, coaches must have timeouts remaining and make the challenge directly after the reported call.
"As with other replay reviews, in order to overturn the event as called on the floor, there must be clear and conclusive visual evidence that the call was incorrect," NBA Basketball Operations President Byron Spruell told teams in a memo.
Unlike the NFL version of a challenge, there's no flag to be used and teams will not retain them even if successful. A team will have to call timeout and the coach "must immediately signal for a challenge by twirling his/her index finger toward the referees," - Tim Reynolds of the AP
"Coaches will get one challenge per game, and they will lose it even if the challenge is successful, according to the memo. They can use it to challenge only called fouls, goaltending, basket interference, and plays when the ball is knocked out of bounds, the memo says." - Zach Lowe of ESPN