The Kings have the "framework of an agreement going forward" to stay in Sacramento, mayor Kevin Johnson announced Monday.
"Today is a new day for Sacramento and a defining moment for our community," Johnson said, flanked by NBA commissioner David Stern and members of the Maloof family, which owns the team.
"We came to Orlando needing to convert both ends of a one-and-one free throw. Over the weekend, the city hit the front end of the free throw by making clear it had delivered on its promises and, today, the Maloof family hit the second free throw by stepping up and increasing their contribution."
The estimated 387 million arena, which would open for the 2015-16 season in the downtown Sacramento rail yards, is now within reach.
Said team owner Joe Maloof: "It's a great day for Sacramento...Our family is just so excited."
The deal was first reported by Rob McAllister of KFBK 1530 in Sacramento and confirmed by Sam Amick of Sports Illustrated.
The city of Sacramento was facing a Thursday deadline from the NBA to strike a deal with the Maloofs for funding to build a 400-million arena in order to meet the NBA's relocation deadline.
The city of Sacramento needs to have a deal with the Maloofs, who own the Kings, to fund the construction of a 400-million arena by Thursday in order to meet the NBA's relocation deadline.
The Kings almost moved to Anaheim last year before Johnson and city leaders convinced the league to give Sacramento one last chance to help finance an arena. Seattle also had been making a renewed push for an NBA team.
The Associated Press contributed to this report.
The Sacramento Kings have had a busy summer with the NBA Draft, free agency and Summer League. Now in the dog days of summer, we've come to the strange times of the offseason.
Big news is bound to still happen, but this is also the time when new trends take over. The latest is the Drive By Dunk Challenge and Kings rookie De'Aaron Fox joined the party on Sunday.
At the start of the challenge, everyday people started posting videos of themseleves getting out of cars to dunk on random neighborhood hoops. Now even NBA stars are getting in on the #DriveByDunkChallenge.
Along with Fox, Anthony Davis and Jaylen Brown have also posted their own videos of the challenge.
SACRAMENTO -- The rumor mill never takes a day off. De’Aaron Fox and his Sacramento teammates were hit with a new round of speculation Sunday morning when a report broke out of Cleveland regarding the Kings interest in All-Star point guard Kyrie Irving.
According to Sam Amico, the Kings are expected to offer Fox, along with veteran Kosta Koufos and possibly more for Irving, who is coming off his best season as a pro. The 25-year-old point guard posted 25.2 points and 5.8 assists last season for Cleveland and is under contract for two more seasons with a player option for a third year.
A league source confirmed to NBC Sports California that the Kings have no interest in dealing Fox, who they acquired with the 5th overall selection in June’s NBA Draft. The 19-year-old is considered the future of the franchise at the point guard position and according to the source, any rumor of the team offering him in a deal are false.
Published reports have Irving asking for a trade out of Cleveland. Sacramento was not on Irving’s short list of potential destinations and the likelihood of the Kings coming up with the assets to acquire the four-time All-Star are slim, unless they are willing to completely change course on their rebuild and gut their young core.