The suit against King and his company, Don King Productions Inc, was filed in US federal court in Manhattan and also seeks a court order rescinding the contract the former world heavyweight champion signed with King while in prison after his 1992 rape conviction.
A spokesman for King said his organization had not seen the suit and "therefore we have no comment."
Tyson is suspended by the Nevada State Athletic Commission for biting the ears of the heavyweight champion, Evander Holyfield, during their rematch last June. He can apply for reinstatement of his boxing licence no sooner than 9 July.
The suit claims that once King and his company controlled "Tyson's monies, purses, accounts, books, and records, they wrongfully took monies from Tyson for their own benefit."
King began to promote Tyson in 1988. The suit claims he also acted as Tyson's de facto manager, giving the appearance that Tyson had independent advisors but essentially controlling all aspects of his career. It claims that King coerced Tyson into signing contracts while he was in prison, without benefit of independent counsel or advice.
Lawyers for King began a High Court action in London on Wednesday against his former business partner, Frank Warren, alleging that Warren owes King money. Shortly after arriving in Mexico City on Tuesday, King was mugged and, according to reports, had a pounds 60,000 diamond encrusted Rolex watch stolen.