In a joint news release, the pair said they had achieved "a broad outline of terms" on the transfer of the former Naval Station to the city's Treasure Island Development Authority, the specifics of which "will be worked out as quickly as possible."
Mabus said the agreement "is good for the American tax payer, will create jobs in the San Francisco region and will effectively transition Treasure Island to productive civilian reuse."
Newsom echoed that sentiment. "Having the terms of this conceptual agreement with the Navy in place will allow us to finalize our development plans and generate badly need jobs in this difficult economic climate," the mayor said.
The city is planning a mixed-use development with a commercial town center and neighborhood, three hotels, parks and open space.
The mayor's office said it would create thousands of construction jobs each year for the 10- to 20-year project, and 3,000 permanent jobs.
U.S. Sen. Dianne Feinstein, in a prepared statement, called it a "landmark agreement."
"After more than 10 years, we finally have a win-win on Treasure Island," Feinstein said.
The agreement includes a guaranteed payment by San Francisco to the Navy of $55 million, followed by an interim payment of another $50 million and "an additional share of potential further profits," the joint statement said.