A background document says the federal government will spend $1.4 million to modernize the International Civil Aviation Organization's conference facilities and add extra security equipment.
The agreement, signed late Monday afternoon in a ceremony at Montreal City Hall, will keep ICAO in Montreal until 2036.
"We have done a deal and it's a good deal," Foreign Affairs Minister John Baird said at the ceremony, which was attended by Montreal Mayor Michael Applebaum and Quebec International Relations Minister Jean-Francois Lisee.
"With the ink now dry on this agreement, the future for ICAO here in Montreal is bright. ICAO will remain here where it belongs, in Montreal, its natural home."
The new accord comes after an intense lobbying effort by Qatar to move ICAO's headquarters to Doha in the Middle Eastern country.
The deal also provides for new accreditation service standards to cut wait times and improved visa services for ICAO delegates. There will also be new and improved identification for consuls-general.
An immigration officer will also be assigned to the Canadian delegation at ICAO to provide improved visa services. There will also be an annual ministerial-level meeting with ICAO management and an outreach program to include ICAO representatives.
Meanwhile, the Quebec government also added to a 1994 agreement on benefits and courtesy privileges as long as the agency is in Montreal. Under the accord, the province has agreed to assume until 2026 the administrative costs for the ICAO premises, at a cost of $15 million.
ICAO secretary general Raymond Benjamin said the organization had enjoyed Montreal's hospitality during the last 60 years.
"I believe we have done well," he said of the agreement, which he described as "satisfactory" in off-the-cuff remarks.
"We are grateful for this."
The organization has been in Montreal since it was founded in 1947. Its current headquarters were built in the 1990s at a cost of $100 million.
Intense lobbying had characterized the bid by Qatar to get the headquarters and Canada's efforts to keep it.
It came to a point where the two countries criticized each other's weather.
Qatar argued it would be nice to escape Montreal's frigid winters while Canadian politicians asked if delegates really wanted to have to endure Doha's blistering year-round heat.
At the time of the announcement that ICAO was remaining in Montreal, Baird had said there had been no quid pro quo efforts to sweeten ICAO members' attitudes to Montreal but that the government wanted to provide the best services to diplomats in Canada.
The Qatari bid had been seen by government critics as being politically motivated and a reflection of Canada's pro-Israel policy in the Middle East — although Baird has characterized Canada's relationship with the Arab world as "excellent."
Losing ICAO would have had financial, as well as political, consequences.
Montreal is the hub of Canada's aviation industry, and its international reputation as a major player is partly based on ICAO's longtime residency.
The organization also feeds the city's economy; it employs 534 staff and says it generates some $119 million annually and 1,200 direct and indirect jobs.