Yes it is a very basic iTunes fonctionnality.
In the preference pane of iTunes you have a tab "Sharing", here you can activate sharing your iTunes library on your local area network. You even have the option to add a password.
When that is done, on your iPad (assuming that it is in the same LAN as your iMac), in the music app on the botton you have a tab called "other", in there you can select a shared iTunes library and connect to it.
Very simple.
There is also a similar tab in the Video App in case you want to stream video also.
And of course, it also work on iPhone and on any other Mac through iTunes.
I must say though that I use iOS and iTunes in french, so the name I used may not be exactly the one you see, but you get the general idea.