The deal with Domi, the No. 12 pick in this year's draft, was announced on Sunday. The Toronto-born forward had 39 goals and 87 points in 64 games last season for London of the OHL.
Domi, the son of former NHL player Tie Domi, led London in goals and points and tied for first on the team in assists and plus-minus.
He also had a team-high 32 points in 21 postseason games, leading the Knights to their second consecutive OHL championship.
"Max is a very talented young player with a bright future," Coyotes general manager Don Maloney said in a statement. "He had an impressive prospect development camp and we look forward to watching his progress."