Under the accord presented by the two sides to US District Judge Ana Reyes on Friday, Trump administration lawyers conceded that DC Mayor Muriel Bowser's appointed police chief, Pamela Smith, would remain in command of the Washington Metropolitan Police Department.
The precise role of Drug Enforcement Administration head Terry Cole, who had been named by US Attorney General Pam Bondi as the city's "emergency police commissioner" under Trump's takeover bid, was still to be hashed out in negotiations.
The two sides opened talks at Reyes' insistence during a hearing before the judge on a lawsuit brought by the city challenging Trump's unprecedented move to assume full control of city law enforcement, invoking an emergency clause of the district's 50-year-old-plus home rule charter.
The lawsuit sought a federal court ruling to block the takeover as illegal, according to DC Attorney General Brian Schwalb.
During oral arguments on Friday, Reyes expressed skepticism that the Trump administration has legal authority to run the city's police force or that Cole can effectively take charge of the department as its chief.
Abigail Jackson, a White House spokeswoman, said in a statement before the hearing: "The Trump administration has the lawful authority to assert control over the DC police, which is necessary due to the emergency that has arisen in our nation's capital as a result of failed leadership."
Trump said on Monday he was deploying hundreds of National Guard troops to Washington and temporarily taking over the city's police department to curb what he has depicted as a crime emergency in the US capital.
Statistics show that violent crime shot up in 2023 but has been rapidly declining since.
Federal law enforcement agencies, including the FBI and the DEA, have deployed agents to patrol the streets and carry out arrests.
On Thursday, US Attorney General Pam Bondi issued an order transferring control of the police department from the city to the DEA's Cole.
Trump, who has suggested he could take similar actions in other Democratic-controlled cities, has sought to expand the presidency in his second term, inserting himself into the affairs of major banks, law firms and elite universities.
Friday's lawsuit, which names Trump, Bondi, Cole, and others as defendants, intensified a growing battle over the city between Bondi and Bowser, who have emerged as the public faces of the power struggle.
Bondi's order had stipulated that the city must receive approval from Cole before it can issue any directives to the roughly 3500-member police force.
It also sought to rescind several of the police department's prior directives, including one that addressed its level of involvement with federal immigration enforcement.
The 1973 DC Home Rule Act is a federal law that established local self-governance for the District of Columbia.
It includes a provision that gives the US president the power to control the DC police in response to "special conditions of an emergency nature" for up to 30 days.
The 30-day period can be extended by a joint resolution of both chambers of the US Congress, something Trump has suggested he might seek.
