Felton was facing felony gun charges. If convicted, he could have spent up to seven years in jail, per Jim Baumbach of Newsday.
As part of his plea deal with prosecutors, Felton will do community service and pay a small fine, attorney Jim Walden said.
Walden thanked the Manhattan district attorney "for focusing on the facts, and only the facts."
"This is a deal that means he can continue his career without interruptions," Walden said.
The point guard was in court on Monday and commented briefly afterward, via the Associated Press' Jennifer Peltz:
Felton was in court as the Manhattan district attorney's office outlined the agreement, which would resolve a gun case that arose amid the breakup of his marriage. He's expected to admit June 30 to at least one charge, attempted criminal possession of a weapon -- he won't have to come to court to do so -- and get a $5,000 fine and 500 hours of community service.
"I want to thank the DA for being fair to me in this whole situation," Felton said outside court, also thanking his family, friends and fans "for supporting me and understanding who, the person, I am."
Felton struggled for New York last year, battling injuries and shooting less than 40 percent from the field. Knicks president Phil Jackson reportedly told him that he would be traded in the offseason.