The news was broken this afternoon by Adrian Wojnarowski at Yahoo! Sports:

The New Orleans Hornets have traded center Hilton Armstrong and cash to the Sacramento Kings in a salary-clearing move, league sources told Yahoo! Sports.

The deal removes Hilton’s $2.8 million salary from the Hornets’ payroll, leaving them only a little more than $500,000 over the luxury-tax threshold. The Kings will send the Hornets a future, conditional second-round pick.

Jimmy Smith of the Times-Picayune reports confirmation of the deal, also from a league source, so it seems it’s as good as done. (Update: Hornets.com makes it official.) A few things running through my mind:

• Why did the Hornets do this? The big and obvious answer is money, as Wojnarowski stated. If the Hornets can now dump the contract of someone like Bobby Brown or Ike Diogu, they’re under the $69.9 million luxury-tax threshold and won’t have to pay the dollar-for-dollar penalty.
• Not only do the Hornets get that $2.8 million off the books immediately with this trade, but they also save themselves the $3.85 million qualifying offer Armstrong would have been owed next season. No other team would have offered Hilton more than that as a restricted free agent in the summer, so the Hornets would have been stuck with him. Update: As noted in the comments, this is incorrect. “If the Hornets didn’t want Hilton on their roster next year, they simply need to NOT extend the Qualifying Offer to him next year. The QO applies only if a team wants to make a player coming off a rookie contract a Restricted Free Agent instead of an Unrestricted one. If Armstrong is not extended a QO, which is the team’s right, he merely becomes a UFA.”
• Armstrong had clearly fallen out of favor with head coach Jeff Bower, racking up eleven consecutive DNP-CD‘s despite being one of the few healthy bigs available with Sean Marks and Ike Diogu out injured.
• When Armstrong did play, he didn’t play well. His averages this season: 2.8 points and 3.4 rebounds in just over 13 minutes per game. He’s currently ranked as the fifth worst center in the entire NBA with a 7.75 PER (and look who’s three spots above him). According to PER, Armstrong’s best season was 2006-07, his rookie campaign, and even then he was worse than average.
• As we saw from the near-trade of Devin Brown a couple of weeks ago, the Hornets were desperate to shed salary. Thankfully that deal didn’t work out, because today’s trade of Armstrong works out better for them in almost every way possible. The only downside I can see is that Amrstrong was a big body who could step in and at least deliver six fouls per game if another of the Hornets bigs were to suffer an injury.

Overall, this trade doesn’t make the Hornets any better or worse right now, but it saves George Shinn some money and avoids Bower having to resort to trading someone like David West to shed salary. Whether that’s a good thing or just a delay of the inevitable is up for debate.