Felton was charged with second- and third-degree criminal possession of a firearm, which are felonies, and fourth-degree possession of a firearm, a misdemeanor, a police spokesman told ESPN New York. Police said Felton was in possession of a gun he wasn't registered to have.
A law enforcement official said Felton's wife, identified as Ariane Raymondo-Felton, brought the gun to police, according to multiple reports.
Felton then turned himself in at 12:50 a.m. ET and was questioned at the 20th Precinct in the Upper West Side of Manhattan, hours after the Knicks' loss to the Dallas Mavericks, a police spokesman told ESPN New York.
Felton is expected to appear in criminal court in Manhattan on Tuesday afternoon.
Felton, 29, signed a three-year, $10 million contract with the Knicks before the 2012-13 season. He has struggled this season, his ninth in the NBA, shooting 40.3 percent from the field and 29.6 percent from 3-point range while averaging 10.4 points per game. The Knicks offered him in several packages before last Thursday's trade deadline but couldn't complete a deal.
New York City has strict gun possession laws.
In 2009, New York Giants wide receiver Plaxico Burress was sentenced to two years in prison after accepting a plea deal on a firearm charge following an incident in which he suffered a self-inflicted gunshot wound to his thigh when his gun went off in a Manhattan nightclub. He faced a minimum sentence of 3½ years if convicted at trial.
The Associated Press contributed to this report.