Housing in remote Northern Territory communities will get $550 million from the federal government after a funding freeze was reversed.
The federal freeze was implemented by the coalition government, which argued indigenous people should have formal input in where funds are spent.
"This agreement will help tackle the severe overcrowding that still persists in many remote NT communities by working with indigenous communities and by setting a strong 40 per cent indigenous employment target as a starting point," Prime Minister Scott Morrison said on Sunday.
Mr Morrison said the NT government's initial opposition to involving indigenous people through the NT land councils was a great disappointment.
The agreement should never have been used as a "political football", Mr Morrison said.
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But Chief Minister Michael Gunner described the funding as a win for the Territory government.
"The Territory Labor government has fought long and hard for the housing funding that was promised to us nine months ago. We've now won that fight," he said.
"When you invest in housing and address indigenous disadvantage, you are investing in generational change and saving money in the long term," he said.
"The federal government's contribution to our government's trail-blazing remote housing program will allow us to continue to make tangible and sustainable differences to the lives of Territorians," Mr Gunner said.
Mr Gunner said local decision-making was always at the core of his government's work in remote communities to improve living conditions and create jobs.
Federal Indigenous Affairs Minister Nigel Scullion said the commonwealth had always been clear about ensuring the four land councils had a formal role in the delivery of housing on behalf of their communities.
"We were also very clear that such a significant project should not only be delivered with Aboriginal people having a say but it should deliver long-term economic and employment benefits to local Aboriginal businesses and workers," Senator Scullion said.
"In fact, we simply never contemplated that the Territory Labor government would so strongly oppose giving Aboriginal people a right to be included in the decision-making or having meaningful indigenous employment targets," he said.
