Finance Minister Wes Sheridan says the memorandum of agreement allows the two governments to begin more detailed negotiations on the implementation of the tax.
He says the deal exempts home heating oil, children's clothing and footwear from the tax.
In its spring budget, the government announced plans to create a refundable tax credit of $150 to $200 to help those with family incomes below $55,000.
Sheridan says the province is still developing a rebate program for low- and modest-income Islanders.
The 14 per cent HST is slated to take effect next April 1, the same day that British Columbia scraps the tax.
It would replace the current 15.5 per cent combination of the GST and PST.
Sheridan also announced plans Wednesday for a series of meetings starting June 20 to discuss the tax with business groups, industry associations and the general public.
"I am inviting anyone with questions about the HST to come to the meetings I will be hosting and get the real answers," he said in a statement. "It is important that Islanders know the true impacts of the HST."
The meetings will be held weekly and will run until the end of August.
Once P.E.I. implements the tax, it will join Ontario, New Brunswick, Newfoundland and Labrador, and Nova Scotia in using the HST.