The agreement will be finalized this week with a news conference to follow, league sources said.
As a member of the 2012 NBA draft class, Kidd-Gilchrist is eligible for a rookie extension prior to the start of the 2015-16 season.
Kidd-Gilchrist, the No. 2 overall pick in the draft, has developed into a cornerstone player for the Hornets at small forward. With the extension, the Hornets and Kidd-Gilchrist will avoid him becoming a restricted free agent next summer.
Kidd-Gilchrist, 21, has dramatically improved his offensive game with a recreated jump shot. Already, he was one of coach Steve Clifford's most important defensive players. Kidd-Gilchrist averaged 10.9 points and 7.6 rebounds for Charlotte last season, his third in the league.