The move is designed to help the project meet construction deadlines set up by the NBA.
Before the vote, council members heard from people on both sides of the issue, including Craig Powell, a critic of the arena financing plan.
"I call on every member of this city council to publicly pledge that you have no intention of consumating that bond sale before the people have a right to vote on June 3rd, provided this thing is qualified."
That "thing" he's referring to is an effort by arena opponents to but the project up for a public vote.
But City Councilman Steve Hansen said keeping the project on track is important.
"Let's keep working hard on this. There's still so much to do and there's a lot of uncertainty. While we have a lot of questions to resolve around community benefits and these other things, we've got a long road. Let's not undermine the project as we go forward. We have a lot of time to refine these answers."
Officials with the Kings say the exemption will also help the team meet its goals for the number of local and small businesses that would be involved in building a new downtown arena. The Kings want at least 60% of the arena work to be done by businesses based in the Sacramento area and 20% by small businesses, figures Councilwoman Angelique Ashby liked hearing.
"I'm excited that this project allows us to do that local component in a real way, in a tangible way and in a very big way for Sacramento. This is about saying to our local chambers, to our local businesses 'you're in and we're going to find a way.'"
The council voted 7-2 in favor of suspending the competitive bidding process.
A Sacramento County Superior Court Judge has ruled against two groups that sued the Sacramento City Clerk over her decision to keep an arena-funding measure off the June ballot.
A Sacramento Superior Court Judge has told attorneys he is inclined to rule against two groups suing the City of Sacramento. They are suing over rejected arena-funding petitions.
Sacramento Mayor Kevin Johnson delivered his State of the City address with the great majority of it focused on the proposed downtown arena.
Plans for a new Sacramento Kings arena are getting good reviews from new NBA Commissioner Adam Silver.
Groups seeking to force a public vote on a new Sacramento arena and other publicly-funded projects have sued the Sacramento City Clerk, the City, and the City Council.
The team says some of the increase is due to a surcharge, but some is simple supply and demand.
Sacramento Mayor Kevin Johnson says he is confident the City would win in court if a group challenges a recent decision by the city clerk.