The Houston Rockets, in an abrupt late twist to their long-running efforts to trade Tracy McGrady, have reached an agreement in principal with the Sacramento Kings to acquire coveted guard Kevin Martin, ESPN.com has learned.

Martin was pulled from the second half of the Kings' game Wednesday night at Golden State in anticipation of the trade, sources said.

Although the details of the complete construction of the trade could not immediately be confirmed, sources said that it's possible that the deal could be expanded into a three-way trade that lands Rockets guard Tracy McGrady with the New York Knicks before Thursday's 3 p.m. trading deadline.

One source with knowledge of the talks told ESPN.com that McGrady will either end up with the Kings or the Knicks by the deadline to bring Martin to Houston after Sacramento refused trade interest in the high-scoring guard for weeks.

Senior writer Marc Stein covers the NBA for ESPN.com.