Hansen released a statement on his website Friday night announcing the new agreement.
"We would like to announce that we have reached an agreement with the Maloofs to raise the price we are offering to purchase the controlling interest in the Sacramento Kings NBA franchise by $25 million - from an enterprise value of $525 million to an enterprise value of $550 million," the statement reads.
Hansen said his team voluntarily raised the purchase price as "a sign of our commitment to bring basketball back to our City and our high degree of confidence in our Arena plan, our financing plan, the economic strength of the Seattle market, individual and corporate support for the team and, most importantly, the future of the NBA."
The announcement came just hours after a source close to a group of Sacramento investors said definitively that the group would match Seattle's original bid of $341 million, according to the Sacramento Bee.
Earlier this week, Sacramento Mayor Kevin Johnson announced a new investor to help fill the role vacated by billionaire Ron Burkle in the city's bid to keep the Kings from moving to Seattle.
Johnson said at his weekly news conference Tuesday that Sacramento developer Mark Friedman has joined the group. The announcement comes a day after Burkle backed out because of a conflict of interest stemming from his ownership stake in Relativity Sports, which manages some NBA players' careers.
Friedman said he will help build the planned arena in downtown Sacramento. He also said he had been in contact with the mayor since January and the timing of Burkle's decision had nothing to with his emergence.
Sacramento is trying to block a bid from a group that has a deal with the Maloof family to buy the Kings and move the franchise to Seattle next season. NBA owners are vetting both offers.
In a Friday night statement released on Twitter, Mayor Johnson said he feels good about Sacramento's chances of keeping the team.
"We know the NBA has never moved a team from a market that has performed and where a clear path to an arena has been demonstrated, which is why as we head into the meetings in New York City next week we are following the process established by the NBA," the statement reads.
The NBA Board of Governors meets next week in New York and is expected to vote on the potential sale and relocation.