With the NBA intent on maintaining as much financial flexibility as possible before selling the Hornets, Landry was offered a bigger number on a one-year basis and took it.
Landry's agent, Mark Bartelstein, told The Associated Press that Landry agreed to only a one-year deal because of the Hornets' "uncertain ownership situation."
Landry was eager to keep playing for Hornets coach Monty Williams after arriving in New Orleans last season in a trade-deadline deal with Sacramento, sources said.
Bartelstein told the AP that Landry likes working with Williams and that general manager Dell Demps did "a great job" of recruiting his client for another year in New Orleans.
The 6-foot-9 power forward averaged 11.9 points and 4.6 rebounds last season with the Kings and Hornets. He replaced David West as New Orleans' primary power forward late last season after West suffered a season-ending knee injury.
"He understands the system. He really thrived later in the season after the injury to David West," Demps said of Landry. "He had some big-time moments for us in the playoffs last year. We want to grow on that. ... He fits our system and we're excited about the agreement."
Landry was willing to give the Hornets at least one more season and remain open to signing an extension if the ownership situation becomes more stable, Bartelstein said.
"He's going to have a great year and we'll obviously revisit things in a few months from now," Bartelstein said.
Marc Stein is a senior NBA writer for ESPN.com. Information from The Associated Press was used in this report.