Gov. Ed Rendell announced the agreement Tuesday at the Pennsylvania Gaming Congress. He said money from the state's new slot machine parlours would help fund the arena.
The Penguins had threatened to leave Pittsburgh if they couldn't secure a new rink. Their lease at 46-year-old Mellon Arena, the oldest facility in the league, expires June 30 and the team is free to leave after that.
Team officials visited Kansas City, Mo., and Las Vegas to discuss a possible move. The Penguins were offered free rent and half of all revenues if they agreed to play in Kansas City's soon-to-be-completed US$262-million Sprint Center.
Rendell said he would fly to Pittsburgh later Tuesday to meet with Mayor Luke Ravenstahl, Allegheny County Executive Dan Onorato, the team owners and NHL commissioner Gary Bettman.
"We will announce that all three governmental entities have reached an agreement for a deal that will keep the Penguins in Pittsburgh" for 30 years.
The Penguins began playing in Pittsburgh in 1967, and won Stanley Cups in 1991 and 1992. Their home attendance and local TV ratings are among the strongest of the NHL's 24 U.S. franchises.