Booming Calgary could have a 38-year supply of land for future development thanks to an annexation agreement with a neighbouring municipality.

In exchange for 104 square kilometres of land, the City of Calgary is promising the municipal development of Rocky View $17.8 million, tax mitigation, grandfather clauses for existing land and joint planning in areas adjacent to the annexed land.

Both councils accepted the recommendations of a mediation committee Monday, ending four years of discussions.

Most of the annexed land is on the southeastern edge of the city, but there are also chunks north of Calgary and along the Bow River on the north side of the Bearspaw reservoir.

It could be a year before the agreement is in place. The plan must first go to open houses, then public hearings and a municipal governing board, and finally needs approval from provincial cabinet.

"It comes with a price tag that is, well, a little higher than we would have liked, but nonetheless recognizing that the adjacent municipality is losing tax revenue and we'll be gaining it," said Calgary Mayor Dave Broconnier.

Rocky View Coun. Earl Solberg said the deal strikes a balance between both regions' needs.

"It gives us an opportunity to know exactly where we can plan and direct growth," he said.

One of the aldermen who worked out the annexation compromise says the extra land should help future homebuyers.

Ric McIver said knowing Calgary will have enough land to handle residential growth for the next 30 years means there will not be more demand than supply.

"Well, if anything I think it will help keep prices down because the experience in other municipalities that have forced themselves to stop growing is that the cities have become unaffordable."