Funding cap of £10m placed on TfL's Garden Bridge contribution
Financial contributions to the Garden Bridge by London's public transport network have been limited to £10m.
Transport for London (TfL) had wanted to provide £30m for the proposed £175m bridge set to stretch from Temple to the South Bank in Lambeth.
But talks broke down after Lambeth Council said not enough had been done to attract private sector backing.
Chair of the Garden Bridge Trust, Lord Mervyn Davies, said he was "delighted to move forward with the project".
In September, Lambeth Council halted negotiations and said it would only proceed if assurances were made that £30m was not taken from Transport for London.
Lambeth council leader Lib Peck said: "I'm pleased we've successfully agreed a deal that will cut London taxpayers' contribution towards the Garden Bridge by two thirds."
Plans for the bridge were approved in 2014, after Lambeth and Westminster City Councils granted planning permission with the chancellor and London Mayor Boris Johnson pledging £30m each, and the rest due to come from private funding.
Lord Davies said: "We have been hugely successful in our efforts to raise funds from the private sector, with £85m pledged to date, and we have agreed that any of the committed funds from TfL spent over the £10 million will be treated as a loan."
But Liberal Democrat Caroline Pidgeon from the London Assembly said: "While I welcome a reduction in Transport for London's payment towards the Garden Bridge, today's announcement simply raises more questions than it answers.
"Why did TfL ever agree in the first place to contribute £30m to the Garden Bridge? How much will TfL be willing to lend the Garden Bridge Trust?"
The Trust said it hoped to begin working on the site in the New Year.