The plan allows bison, also known as buffalo, to range on more than 330,000 acres of public lands in Montana, said Stephanie Adams, Yellowstone program manager for the National Parks Conservation Association.
The deal is a step toward ending part of a 16-year program during which thousands of bison were rounded up and ultimately slaughtered after wandering outside the boundaries of the park, which spans parts of Wyoming, Montana and Idaho.
Depending on the size of the herd and how many wander outside of park bounds, some of the bison may still be killed, under the program to manage the animal's population.
The plan, forged by eight government and tribal entities including the National Park Service, the U.S. Forest Service and the Intertribal Buffalo Council, also regulates the number of bison allowed inside the park.
Bison once numbered in the tens of millions west of the Mississippi, but extermination campaigns in the late 19th century cut their numbers to fewer than 50 that found refuge at Yellowstone.
They have since rebounded and are a top draw for the millions of tourists who annually visit the park. In recent years the herd inside Yellowstone has exceeded the current population target of 3,000, triggering aggressive culling.
The practice of capturing bison outside the park and limiting their numbers within Yellowstone stems largely from cattle industry concerns that stray bison could transmit brucellosis, a disease that can cause cows to miscarry, to herds grazing near the park.
Yellowstone bison have been exposed to the disease but there is no known case in which it has been transmitted in the wild from a buffalo to a domestic cow, government wildlife managers said.
Wednesday's agreement formalized a plan announced in December by Montana Gov. Steve Bullock to allow migrating bison to roam public lands in his state. The move was hailed by conservationists but opposed by ranchers.
On Monday, 88 bison from a national park in Canada were shipped to the Blackfeet Indian Reservation in northwestern Montana as part of a broader plan to restore the massive, hump-shouldered animals on American Indian lands across the Western United States.
About 20 of those will be moved to the Oakland Zoo later this year and their offspring will be returned to the Blackfeet, said the California zoo's chief executive, Joel Parrott.