The deal contains no option years for Knight. The contract can't be signed until July 9, when a leaguewide moratorium on player business is lifted.
Knight, 23, has emerged as one of the better scoring point guards in the NBA, averaging at least 17.0 points the past two seasons.
He was playing well this past season for the Milwaukee Bucks, leading them in scoring and assists and to a 30-23 record, but was surprisingly traded to the Phoenix Suns in a deadline deal.
Knight was limited to just 11 games with the Suns due to a left ankle injury. He ultimately had arthroscopic surgery on the ankle in April, a procedure that Suns president of basketball operations Lon Babby later called "minor."
With his return, a backcourt tandem with Eric Bledsoe -- which never materialized in 2014-15 due to Knight's injury -- will be formidable.
"[Bledsoe is] very, very unselfish. He's just trying to make the right play, trying to win," Knight said on SiriusXM NBA Radio earlier this offseason of Bledsoe. "So, as far as playing with Eric goes, I think it's a great thing because you have two players that can attack at any time, instead of having one team focusing on just one of us. Being able to have two guys that can really break down a defense at any time, I think, will make it not only easy for myself, but easy for him as well."