Diallo, 22, comes to the Suns with hopes that coach Monty Williams can speed along his development as an active, 6-foot-9 player.
The Suns hold a team option on the second year of the deal, a league source said. The Pelicans didn't tender a qualifying offer to Diallo, allowing him to become an unrestricted free agent. New Orleans drafted forward Zion Williamson with the No. 1 overall pick.
Diallo played 133 games in his three NBA seasons since leaving Kansas after his freshman season. He is a native of Mali.