According to the BBC, the Death Row Records founder made the plea to avoid charges of murdering of one man and attempting to murder a second with his pick-up truck in Los Angeles.
The incident happened after an argument over the making of Straight Outta Compton, a biopic about rap group NWA.
Knight will be formally sentenced to 28 years in prison in October.
His record label helped launch the careers of artists including Dr Dre, Tupac Shakur and Snoop Dogg.
Under Californian state law, a no contest plea is the legal equivalent of a guilty plea.
As part of the agreement, the murder charges against Knight, 53, will be dismissed by prosecutors, along with separate criminal cases charging him with robbery and making criminal threats.
The deal, in which Knight admitted using a “deadly and dangerous weapon” when he ran down two men with his vehicle, calls for him to serve 22 years in prison for voluntary manslaughter with a further six years because of the US “three-strikes” law relating to repeated violations.
Had Knight been found guilty of murder as originally charged, he would have faced life in prison, prosecutors said.