Hours after Michigan Gov. Gretchen Whitmer announced plans to end COVID-19 restrictions by July 1, she and Republican lawmakers on Thursday agreed to end a stalemate and begin negotiating billions of dollars in federal aid.

As part of the deal, Whitmer will withdraw proposed rules from April that would have made some pandemic workplace safety policies permanent.

Whitmer’s office confirmed she also agreed to “have a conversation about formalizing legislative input on epidemic orders” in the future, should they be needed again, giving Republicans a possible seat at the table they have demanded for the better part of a year.

In exchange, GOP leaders said, they will resume budget negotiations with the Whitmer administration, a process that should start as soon as next week.

That’s a big deal since billions of dollars have yet to be budgeted, including $6.5 billion in federal stimulus funding that will begin coming to the state this month, roughly $2 billion in federal funding left over from previous COVID relief packages, additional federal money for Michigan schools, and a projected budget surplus.

“Michigan is in a very strong position to make large investments that can transform the state and help our residents and businesses recover from the pandemic,” Whitmer said in a statement. “This is a moment in Michigan’s history that can deliver real and lasting positive outcomes for the state.”

Protesting the Democratic governor’s response to the pandemic, the GOP-led Legislature had shut Whitmer out of spending talks months ago. Legislators had used federal funding to try and seek policy concessions from the governor, conditioning spending plans on separate proposals to limit state health orders and gubernatorial powers.

Among other things, $1.5 billion in federal aid for child care remains in limbo because of the standoff.

House Speaker Jason Wentworth, R-Farwell, said Whitmer’s willingness to work with the Legislature on the workplace safety rules and future orders warranted a new approach.

“I’ve consistently said I believe the budget process is better with the governor involved, and the state’s pandemic management is better with the Legislature involved,” he said in a statement.

“The critical issues facing our state are simply too big and are hurting too many people for us to waste any more time. The people we represent are tired of disagreement and just want results. This agreement is a good first step in getting us to that point.”

The deal comes as pandemic orders that Republicans had fought for months are nearing an end.

Earlier Thursday, Whitmer announced plans to lift all outdoor capacity limits and ease other restrictions on June 1 before lifting all other “broad” orders on July 1, signaling a return to normalcy 14 months after COVID-19 was first discovered in Michigan.

Her plan was met with mixed reactions from Wentworth and House Speaker Mike Shirkey, who had both sought a firm date but questioned the governor’s timeline.

Whitmer’s administration had already said it was revisiting separate workplace safety rules, which are now in place on a temporary basis, but Republicans and business groups had lobbied the governor to scrap plans for a permanent version.

She’ll do just that under the new deal with GOP leaders, announcing plans to rescind the permanent rules proposal and cancel a public hearing that had been scheduled next week.

Her office said the state is “confident that completing the normal rule-making will not be necessary,” because of “rising vaccination rates and falling case numbers” and recent guidance from the Centers for Disease Control and Prevention that vaccinated people don’t have to wear masks.

Shirkey, R-Clarklake, called the proposed rules part of “a foolish political game that should have ended the minute the CDC updated its guidelines.”

Whitmer’s decision to withdraw the permanent rules is a “good faith gesture that she is willing to work with the Legislature,” Shirkey added in a statement that was nonetheless critical of the governor.

“I see it as a positive for Michigan that with each passing day the governor draws closer to reason in her handling of COVID.”

The deal caps months of bickering, maneuvering and lawsuits over Whitmer’s use of broad powers and emergency orders to respond to the pandemic.

Legislators sued Whitmer when she extended a state of emergency past April 30, 2020, without their approval.

The state Supreme Court eventually ruled she had overreached her authority, but her administration continued issuing emergency orders through the health department, to the chagrin of Republicans.