The owner of Turtle Bay Resort on Oahu’s North Shore has agreed to sell some of its development rights to the state, the city and a trust for $48.5 million in a deal that will reduce the resort’s expansion plan and preserve much undeveloped land.

Gov. Neil Abercrombie announced the agreement Thursday following several months of negotiations between state representatives and Turtle Bay management firm Replay Resorts Inc.

"I am overjoyed to be able to say this combination of private and public coordination, collaboration, cooperation has borne fruit in terms of keeping the country country,"Abercrombie said.

The agreement, which the governor called historic, removes 650 homes from Replay’s expansion plan, including 225 previously slated to front Kawela Bay.

The resort would still be able to develop two hotels with a combined 625 rooms and 100 homes on about 150 acres fronting the ocean on opposing sides of the existing 443-room Turtle Bay hotel.

Preserved from development will be 665.8 acres, including 70 acres fronting Kawela Bay and about 600 acres largely occupied by Turtle Bay’s two golf courses.

The area to be preserved includes trails and two planned oceanfront parks at Kawela Bay and Kahuku Point for public use.

A conservation easement will be attached to the land, prohibiting development in perpetuity while leaving ownership of the land in private hands.

Paying for the easement will fall mostly to the state, which agreed to contribute $40 million, subject to the Legislature approving that amount in general obligation bonds as long-term financing.

The city will provide $5 million already appropriated by the City Council and endorsed by Mayor Kirk Caldwell. Another $3.5 million will come from The Trust for Public Land, a San Francisco-based nonprofit that raises funds to create parks for public use.

Caldwell said the money will be well spent. "There couldn’t be a more beautiful place, in my mind,"he said.

If the financing comes together, the easement purchase could be done by the end of the year and conclude what has been several years of community and government efforts to limit expansion of the resort.

Turtle Bay Resort was approved for an additional 3,500 hotel and condominium units in 1986. Aprior owner announced plans to move ahead with expansion in 2006, which prompted then-Gov. Linda Lingle to entertain efforts to acquire resort property or an easement.

Community members continued the effort after Replay and a new owner made up of financial institutions and investors took over the resort in 2010 and later voluntarily reduced the expansion plan to 1,375 new units — 650 hotel units and 750 residences.

Last year the preservation effort heated up through a bill introduced by Sen. Clayton Hee (D, Heeia-Laie-Waialua) calling for condemning land planned for resort expansion if an amicable transaction could not be reached.

In November a working group of state officials and preservation advocates proposed paying nearly $40 million for an easement covering 610 acres and limiting development to two hotels. Replay said that value wasn’t fair but agreed to continue negotiating.

Drew Stotesbury, CEO of resort operations and development for Replay, said community and government leaders who pursued constructive change helped produce an acceptable conservation plan.

"This agreement is proof that private-public partnerships can achieve conservation of treasured natural resources,"he said. "These spectacular stretches of shoreline and large tracts of land will be preserved forever as open space for all to appreciate."

Many government leaders and community members who had a hand in the result and attended the ceremony Thursday recognized Bill Paty, a former chairman of the Board of Land and Natural Resources who headed a Turtle Bay advisory group under Lingle.

"This was a long battle,"said state Attorney General David Louie, who was involved in final negotiations, "but we were able to get it done."