The Hornets will receive an inital £3million for King with a further £2million based on appearances.
"Marlon wanted to go in the summer but we managed to keep him here but then he came in Christmas and said we had to let him go to secure his family's future," Chairman Graham Simpson has said.
"We have to remember that this is a man who has been in prison and had the opportunity to resurrect his career.
"If someone offered you twice what you earn you'd consider it and your wife would make you think about it too. He wasn't on peanuts here but he didn't have a three-and-a-half-year deal here either."