Banks received a surface wound to his side and required stitches, his agent, James Gould, said in a statement.
"He's recovering well, there's no damage and no residual effects, so it looks like he's going to make a full recovery and be just fine," Gould told The Washington Post on Sunday. "Brandon's friend also is recovering. He was talking today, and also is expected to make a full recovery."
In a statement released Monday, Gould said Banks "still remains in a local hospital for precautionary reasons and is expected to be released within 24 hours. He would like to thank everyone again for their concerns."
Banks' friend, identified by The Post as Christopher Nixon, was critically injured and underwent surgery, according to Gould.
The stabbing occurred shortly after 3 a.m. outside The Park at 14th, an upscale nightclub.
According to D.C. police, a man got into a verbal altercation with two men, then pulled a knife and stabbed them. Police didn't identify the victims, but the Redskins confirmed that Banks was injured in the attack.
The suspect -- Jason Shorter, 24, of Lanham, Md. -- was arrested and charged with assault with intent to kill, police said. Police and jail officials didn't know if Shorter had an attorney.
The Post reported that Nixon and Shorter got into an argument that turned into a fight. When Banks and a bouncer attempted to break up the scuffle, Shorter unveiled a folding knife and began to slash at Banks and Nixon.
Banks wasn't implicated in any wrongdoing, Gould said.
At 12:43 a.m., before the incident, Banks tweeted, "Park gonna b to much for me tonight."
"Brandon's immediate concern is for his lifelong friend who is like a brother to him," Gould said. "He would like to thank everyone for their prayers and well wishes for him and his lifelong friend."
The team was gathering facts about the incident, Redskins spokesman Tony Wyllie said.
Banks, an undrafted rookie out of Kansas State last season, returned a punt 53 yards the first time he touched the ball in an NFL game. He also recorded a 96-yard kickoff return for a touchdown. He is the lightest player in the NFL -- listed at 5-foot-7, 150 pounds.
The Associated Press contributed to this report.