The Hornets will also get shooting guard Troy Daniels and will send a second-round pick to the Timberwolves. The deal was announced on Tuesday.
The 32-year-old Williams is averaging 12.2 points and 6.4 assists per game in 41 games, including 19 starts for the injured Ricky Rubio. He is second on the team shooting 34.7 percent from 3-point range. He will give the Hornets a reliable veteran backup to Kemba Walker.
The 30-year-old Neal is a score-first guard averaging 9.9 points per game this season.
Charlotte started the day 22-29 and tied with Miami for seventh in the Eastern Conference.
Yahoo! Sports first reported the trade.