The Hornets, who host the Pistons on Tuesday and will enter the All-Star break in contention for a playoff spot, are without star point guard Kemba Walker, who will miss at least another five weeks while recovering from surgery on his left knee.
"We are excited to be adding two quality players to our organization," Hornets general manager Rich Cho said in a statement. "Mo Williams is a proven NBA player who gives us additional versatility and depth in the backcourt, both while Kemba Walker is out and after Kemba returns."
Williams, 32, was a reserve last season for the Trail Blazers but has started 19 games this season for Minnesota, filling in for the injured Ricky Rubio at point guard. A 12-year veteran, Williams is averaging 12.2 points and 6.4 assists in 41 games this season.
"This was a difficult decision because of what Mo brought to our team and the impact he had on our young guys," Wolves coach Flip Saunders said in a statement. "As a coach, you wanted to keep him because of his professionalism and understanding of what you wanted out of him as a player."
Williams, who scored a career-high 52 points against the Pacers last month, should provide a scoring boost at point guard for Charlotte, which has primarily used Brian Roberts at the position since Walker's injury.
"[Williams] scored 52 points against Indiana and did everything we asked him to do," Saunders said. "On the other side, we knew we were moving in a different direction with our youth, so we felt it was in our best interest to make the deal. We thank Mo and Troy for their contributions and wish them the best of luck in Charlotte."
Daniels has played sparingly for Minnesota this season, averaging 2.8 points in 19 games. Neal, 30, averaged 9.6 points in 43 games with Charlotte this season.
"In moving Mo, we felt it was important to get a proven scorer and 3-point shooter like Gary," Saunders said. "Gary was a solid rotation player with San Antonio for three years and an important contributor in the Spurs' playoff runs. We also get a second-round pick, which is another future asset for us."
In a separate deal Tuesday, the Wolves acquired rookie power forward Adreian Payne from the Atlanta Hawks for a lottery-protected 2017 first-round draft pick. Payne, the No. 15 overall pick in the 2014 draft out of Michigan State, has only played in three games this season because of injuries and the Hawks' depth at forward.
The move gives Atlanta an open roster spot as well as a trade chip to potentially use in a future deal as it looks to add pieces for a playoff run.
"We are extremely excited to welcome Adreian to Minnesota," Saunders said. "Adreian fits the mold of a young, athletic and talented player who we believe will fit in well with our young and talented core. We've liked him for a while and look forward to seeing him grow with us in a Wolves uniform."
The Timberwolves have a trade exception from the Kevin Love trade to Cleveland last summer, so they do not have to send a player back in return.
Information from ESPN.com's Brian Windhorst and The Associated Press was used in this report.