Natural Resources Minister Tom Marshall announced the deal today, adding that it will take place when negotiations for a new contract are done for all eight unions at the west coast mill.
He says the budget set aside a $90-million loan to provide support to the mill to help the company as it continues to face challenges in the industry.
Marshall says the mill, forestry operations and Deer Lake Power employ 610 workers and is the only paper producer in the province.
The mill shut down one of its paper machines for two weeks earlier this year, affecting about 110 employees.
Last June, the majority of more than 300 workers at the mill accepted a new contract amid the threat of imminent closure as the forestry industry faced declining demand for paper.