Sacramento's city council approved a plan that would help finance the team's bid for a new $391 million arena, according to the Associated Press.
Both the Kings and the NBA signed a non-binding term sheet, which would keep the Kings in Sacramento for the next 30 years.
According to the report, the city will pay $255.5 million towards the arena, and the Kings will be responsible for the rest. It is slated to open for the 2015-16 season.
"I want to thank you on behalf of my family and our organization for taking the next step forward," Kings co-owner Gavin Maloof told the council according to the AP. "We look forward in working with you throughout this process and we are excited about this. We appreciate your efforts. This is a great day for Sacramento."