Also included for the Bucks would be center Slava Kravtsov and forward Khris Middleton.
In the deal, Jennings, a restricted free agent, would be receiving a three-year, $24 million contract with the Pistons.
Just 12 days ago, Pistons general manager denied having any conversations with the Bucks about Jennings.
The Pistons have been active players in free agency, already adding Josh Smith on a four-year, $54 million deal ad Chauncey Billups on a two-year contract. With Knight, Rodney Stuckey, Will Bynum, Billups and rookie Peyton Siva in place, something had to give, and it turned out to be Knight.
Knight, 21, showed promise last season in his second season, averaging 13.3 points and 4.0 assists in 75 games.
For Jennings, $8 million a year seems like a fair market value for a guard that is woefully inefficient, but still extremely talented with a solid amount of upside. A report from a few weeks ago said Jennings was demanding $12 million a year. Jennings was selected 10th overall by the Bucks in 2009.
Jennings, 23, averaged 17.5 points and 6.5 assists in 80 games for Milwaukee last season.