On Wednesday, the Sioux Valley Dakota Nation Governance Act received royal assent in Parliament.
Aboriginal Affairs Bernard Valcourt said in a news release the announcement sets the stage for the First Nation to build a healthier and more prosperous future for their community.
The Manitoba band becomes the 34th aboriginal community in Canada to become self-governing.
According to the government, the agreement creates a governance regime that is more transparent, accountable and responsive to community needs and direction.
The new release says it will help promote improved living conditions in the community and foster a positive climate for investment and economic development.
Under the pact, the Sioux Valley Dakota Nation will be able to make their own laws in more than 50 key subject areas, including governance, economic and social development, education, and housing.
Provincial legislation is also needed in order to bring the agreement into effect.
"Our government is firmly committed to strengthening relationships with First Nations," said Valcourt. "That is why we continue to take action to support more self-sufficient and prosperous First Nation communities."
Chief Vincent Tacan said the agreement "will not only benefit Sioux Valley Dakota Nation, but will create new opportunities for other First Nations in Canada who wish to enter into and develop their own agreements."