Councillors voted 10-3 in favour of the master agreement with Oilers owner Darryl Katz.
The rink will cost $480 million but $107 million still needed to be raised.
The city had hoped the province would make up that shortfall but Premier Alison Redford has repeatedly said there would be no direct provincial funding for an arena.
On Wednesday, city councillors also voted in favour of using $45 million from the city's portion of provincial funds for municipal infrastructure to make up for a chunk of the missing money.
Also on HuffPost