General manager George McPhee announced the deal Saturday. Karlsson gets a significant raise from his previous $1 million salary.
"In the arbitration process, it helps to get the deal done," McPhee said. "The parties get sharper and more focused as the hearing nears. We're happy with this deal and we believe that William is as well. He seems to be happy with it. It was a good compromise."
The 25-year-old Karlsson set career highs with 43 goals and 35 assists in 82 games last season, helping Vegas win the Pacific Division and reach the Stanley Cup Final. He won the Lady Byng Award for sportsmanship and gentlemanly conduct with a high standard of play.
Karlsson was hoping for a long-term contract, but instead gets a one-year deal before becoming a restricted free agent once again next season.
"There are cases like this one where sometimes both sides need a little more time to evaluate what that value is," McPhee said. "He's being paid very well, similar to his linemates. We talked about being happy that we have the deal done and both sides are looking forward to getting going next year and at some point next year getting a deal done."
The Golden Knights selected Karlsson from the Columbus Blue Jackets in the expansion draft in the summer of 2017. He had 18 goals and 32 assists in 183 NHL games before last season.