The deal was struck shortly after the New Jersey Nets presented a front-loaded offer sheet that would have been difficult for Charlotte to match because it's close to hitting the luxury tax, a payroll figure owner Michael Jordan said the team would not exceed.
Agent Brian Elfus said two other unnamed teams also expressed interest in the athletic shot blocker, whom the Bobcats considered as one of their top offseason priorities.
"Tyrus is happy this deal is done," Elfus said. "He's very happy about returning to Charlotte and playing for coach [Larry] Brown."
The year-by-year breakdown of the deal had yet to be determined, Elfus said. Bobcats general manager Rod Higgins said he wouldn't comment until the deal was signed.
It was part of a busy day for Higgins and the Bobcats, who also reached terms with former Sacramento and Washington reserve forward Dominic McGuire on a one-year deal worth about $900,000.
The Bobcats are convinced the 6-foot-10 Thomas will be a key cog in their rotation despite past troubles. The No. 4 overall pick in the 2006 draft by Chicago was suspended twice by the Bulls for conduct detrimental to the team and had been criticized for not reaching his potential.
Thomas, the type of long, athletic, versatile player Brown craves, averaged 10.1 points and 6.1 rebounds in 25 regular-season games with Charlotte. He closed the season with 21 points and nine rebounds in a loss to Orlando that completed the Magic's first-round playoff sweep.
The Bobcats made a one-year, $6.2 million qualifying offer to Thomas last month to make him a restricted free agent. Thomas said last month that his preference was to sign a long-term deal with the Bobcats.
The 6-9 McGuire had his best season in 2008-09, when he averaged 4.5 points and 5.4 rebounds for the Wizards. But he averaged less than a point a game last season before he was traded to Sacramento in February.
McGuire played in 10 games with the Kings before being sidelined with a foot injury. Sacramento didn't give the 24-year-old McGuire a qualifying offer, making him an unrestricted free agent.
McGuire's addition gives Charlotte a multitude of big men, perhaps to set up a future trade to address other concerns.
The Bobcats have been active in trade talks with several teams, intent on unloading a big contract to clear salary-cap space.
ESPN.com's Chris Sheridan and The Associated Press contributed to this report.