A NEW FUNDING AGREEMENT for the Rose Fitzgerald Kennedy Greenway Conservancy was unveiled on Monday that requires a smaller amount of taxpayer money from the state along with new contributions from park abutters and the city of Boston.

State officials had said they wanted to zero out their $2.3 million annual payment for Conservancy operations, but they ended up agreeing to pay $1,050,000 annually — $750,000 in cash along with $300,000 in in-kind contributions.

The owners of about half the properties along the Greenway agreed to try to form a Business Improvement District that would contribute $1.5 million a year to the park — $1 million for operations and $500,000 for BID-directed enhancements to the park. And the city of Boston agreed to pony up $5 million it expects to receive from Millennium Partners in connection with the development of the Winthrop Square Garage site. The $5 million is expected to generate $250,000 a year in interest, which will go for Conservancy operations.

Baker administration officials applauded the agreement at a meeting of the board of the Massachusetts Department of Transportation, with Transportation Secretary Stephanie Pollack calling the agreement “a series of excellent outcomes.”

But in May Pollack had bristled at suggestions by the Conservancy that state funding of the park continue for another 10 years. At the time, Pollack said the Baker administration wanted to end all contributions to the Conservancy for operating expenses. In the negotiations that ended at noon on Monday, Pollack agreed to keep state money flowing, albeit at a slower pace. The state also agreed to a 10-year lease for the Conservancy, with options to extend the lease for two additional 10-year terms.

Joseph Sullivan, the mayor of Braintree and a member of the MassDOT board, characterized the deal as a broadening of the Greenway’s support. “The Commonwealth is not really stepping back,” he said. “We’ve created a much stronger foundation.”

The state currently provides $2 million in operating and $300,000 in in-kind funding to the Greenway. Under the new deal, the amount will remain the same, but the state’s share of the total will fall to 46 percent, the abutters’ share will be 43 percent, and the city’s share will be 11 percent.

The state will also provide up to $360,000 in capital funds for the Greenway. The Greenway, which is essentially a series of small parks that cover the Central Artery, is owned by the state.

The group A Better City, whose membership ranks include about 20 of the Greenway’s roughly 40 abutters, agreed to push for the creation of a Business Improvement District that will pay additional taxes to support the park. To take effect, the BID will need the approval of the Boston City Council and the support of 60 percent of the property owners. It’s expected the BID will take a year to form, so the state will provide bridge funding for the coming year.

Major property owners along the Greenway include Donald Chiofaro, the owner of One Financial Place and the Boston Harbor Garage; Tishman Speyer, the owner of 125 High Street; Boston Properties, the owner of Atlantic Wharf; Rowes Wharf; and the  Federal Reserve Bank.

Officials said the Conservancy currently raises about $3.2 million a year through fundraising and revenue initiatives. The new 10-year lease, which replaces a series of one-year leases, is expected to enable the Conservancy to boost its money-raising efforts.