The City of Regina and the Rural Municipality of Sherwood are taking a major step toward smoothing over their rocky relationship.

The two municipalities announced a new agreement Tuesday that will set out a framework for resolving development issues in the areas surrounding Regina.

The memorandum of understanding will also create three working committees, with representatives from both municipal councils and administrations, to deal with development issues.

It also designates a “joint planning area” surrounding Regina, which includes large parcels of land the city plans to annex to expand its boundaries.

Regina Mayor Michael Fougere says the city is one of the fastest growing communities in Canada, and it’s crucial that the two municipalities work together on issues of mutual interest.

RM of Sherwood Reeve Kevin Eberle called the agreement a “new start to a better working relationship” between the city and the RM.

Regina city council unanimously endorsed the memorandum of understanding at its meeting Monday night. The RM of Sherwood council is also expected to approve the agreement at a meeting scheduled for Wednesday.

In May 2012, the RM asked the province to disband the Sherwood-Regina District Planning Commission that was created by the two municipalities in 1958 to discuss development issues.

The newly announced agreement was reached following two months of mediation between the two sides.