The Peguis First Nation and the Manitoba Jockey Club have announced plans to create a major development at the Assiniboia Downs.
The development will include a hotel and retail space, aimed at attracting tourists to the spot.
Officials said the deal was made possible by a federal land entitlement claim made in 2009.
The announcement came as the Horse Racing Commission threatened to pull the simulcast betting license for the Downs next year.
On Thursday, Manitoba Jockey Club lawyer Jeff Rath said the Manitoba Horse Racing Commission agreed to an interim simulcast betting license for Assiniboia Downs that will last until late February, while both sides continue with their legal battle.
The commission is concerned about whether Peguis will take ownership of the land.
Darren Dunn, Chief Executive Officer of Assiniboia Downs, says the deal with Peguis First Nation will keep the race track alive.
He said once the hotel and retail development go up, the tens of thousands of vehicles that drive by the site daily will have a reason to come in.
"There's a lot of traffic flow out here and we look to capture that," he said. "Positive cash flow from that will go to benefit horse racing in the future and certainly, obviously, generationally benefit Peguis First Nation."
Dunn said the development will bring millions of dollars worth of jobs and economic spin-offs to the area.
He said the Downs and Peguis spent a lot of time hammering out the vision.
"We have the equity and they have the capital," he said. "We found what we think is the perfect marriage and it's taken close to two years to get to today's announcement, a lot of hard work, but in saying that, I think it's all worth it. It's a very bright day out here."
Peguis Chief Glenn Hudson said he is confident the deal will help iron out the difficulties over the Down's simulcast betting licence.
"I think it's exciting for both the Downs and certainly exciting for us," he said. "And I think the horse racing commission will also find out at the end of the day it will be an exciting opportunity, even for them."
The Downs has seen its fair share of controversy in recent months.
Earlier this year, the Manitoba Jockey Club became embroiled in a dispute with the provincial government over a potential sale of Assiniboia Downs to the Red River Ex.
The sale would mean a $5 million cut in funding to the jockey club, so the group took the province to court.
In May, the Manitoba Court of Queen's Bench ruled the province couldn’t immediately remove the jockey club's funding to run the Downs.