No trade is imminent, but the two teams have moved closer on terms, and both are motivated to find a final pathway to a deal, league sources said.
Hill has been unhappy with his role with the Kings, whom he signed with last summer after turning down a more lucrative extension offer with the Utah Jazz. The Kings are determined to accommodate Hill's desire for a trade, and his ability to guard both positions in the backcourt could help the struggling Cavaliers' defense.
Sacramento has to clear a roster spot to take on one or two additional players in a trade with Cleveland and has been discussing deals for the Kings' young forwards Malachi Richardson and Skal Labissiere, league sources said.
The Cavaliers have had some hesitancy about the guaranteed $19 million remaining on Hill's contract in the 2018-19 season, league sources said, especially if LeBron James leaves in free agency and the Cavaliers move toward a rebuild. Only $1 million of the $18 million on his 2019-20 contract is guaranteed, making it easy to waive Hill.
Frye would be eager to negotiate a buyout with the Kings on his $7.4 million expiring contract, league sources said.
Hill was held out of the Kings' road win over the Orlando Magic on Tuesday, part of Sacramento's strategy to rest veterans throughout the season.