Kings president of basketball operations Geoff Petrie announced the deal Monday, saying Armstrong would contribute immediately at power forward and center.
The trade is crucial for the Hornets financially, bringing them to within $530,611 of the league's luxury-tax line.
New Orleans essentially had to give away Rasual Butler (Los Angeles Clippers) and Armstrong to get there, but one more minor trade -- shedding the contract of a reserve such as Bobby Brown or Ike Diogu -- will get the Hornets under the tax threshold and make them eligible for the estimated $4.5 million payment given to all non-taxpaying teams next summer.
The Kings, meanwhile, address a need for size and athleticism in the frontcourt by using more than $4 million in available salary-cap space -- no team in the league had more -- to absorb Armstrong's expiring contract in exchange for nothing more than a future second-round pick.
Armstrong is in his fourth NBA season out of Connecticut. He is averaging 2.8 points and 3.4 rebounds in 18 games this season. He has played 209 career games, averaging 3.6 points and 2.7 rebounds per contest.
Armstrong was the Big East defensive player of the year in 2006.
Information from ESPN.com's Marc Stein and The Associated Press was used in this report.