Suge was facing life in prison for killing Carter in 2015 in the parking lot of Tam's Burgers in Compton.
Knight ran over Carter after a fistfight with Compton consultant Cle "Bone" Sloan, whom he also clipped with his truck. One of the men struck, Terry Carter, died from his injuries.
In pleading no contest, equivalent to a guilty plea under California law, the 53-year-old co-founder of influential hip-hop label Death Row Records admitted using a "deadly and unsafe weapon" when he ran down two men with his pickup truck.
The rap mogul faces a 28-year prison sentence as part of his plea bargain.
Knight's attorneys had argued he was fleeing armed attackers. 22 years will be served for the charge of vehicular manslaughter, while an additional 6 years was added due to a third strike violation.
His most recent charges include murder, attempted murder, and hit-and-run after he fled the scene of an altercation outside of a Compton restaurant in 2015.
Surveillance video that showed Knight hitting the two men with his truck was likely to play a central role for both sides.
Mr Sloan has denied claims he was carrying a gun during the confrontation.
Death Row Records head Suge Knight pleaded no contest to voluntary manslaughter in court on Thursday.
Death Row Records launched stars such as Snoop Dogg and Tupac Shakur but collapsed in 1996 when Knight was jailed for violating a probation order by beating up a rival in Las Vegas.
While his label was initially very successful, his fortunes began to slide in 1996 when rapper Tupac Shakur was shot and killed in the passenger seat of Knight's vehicle.
Knight, who was incarcerated at the time, was named by police a few years later as a suspect in the Wallace slaying but was never charged.