In announcing the deal, Provo Mayor John Curtis called Rock Canyon a "natural treasure" for the community.
"The stunning majesty of the canyon walls," he said in a statement, "fosters tranquillity, enhances our appreciation of nature's forces and strengthens our sense of timelessness."
The paths, he noted, are favorites for hiking, biking, jogging and strolling. The canyon also is a favorite for technical rock climbers.
In 1998, Richard Davis and Greg Sperry acquired a mining claim to 80 acres at the mouth of Rock Canyon. Five years later, Davis began to remove granite and quartzite.
In October 2003, Provo filed misdemeanor charges, stating that the area was not zoned for such activities.
Shortly thereafter, Sperry sold his share to Red Slab LLC, a corporation formed by state Sen. John Valentine, R-Orem, to preserve the canyon. But, in November 2005, Davis sued in 4th District Court, claiming that Provo had illegally annexed the land. He also raised ownership issues and the legitimacy of a conservation agreement between Red Slab and Provo.
Although the court ruled that Provo had not illegally annexed the land, other claims by Davis remained and he held onto a 50 percent ownership of the land.
Tuesday's settlement puts all claims to rest, enabling Red Slab to transfer its share of the canyon to Provo, which will manage the canyon through the parks department, Valentine said.
Before Tuesday's settlement, Provo owned trailheads and springs at the mouth of Rock Canyon.
The mayor said Tuesday a negotiated settlement was the best outcome to the stalemate.
"The litigation was expensive and was likely to continue for many more years," the mayor said. "The best solution seemed to be to find a settlement, which fairly compensated the economic interests of some parties yet preserved the canyon's present status for future generations."
Valentine said the settlement offers assurance to recreational users of the canyon "in perpetuity."
"I'm pretty excited about this," Valentine said. "This looks like it is going to finally preserve the canyon for the future of Provo City and the citizens of Utah."
Save Our Canyons executive director Carl Fisher applauded the city's "foresight" in reaching a deal.
"It's been a fairly contentious battle over the years and [the canyon is] certainly near and dear to many people around the Provo area," Fisher said. "It's delightful really to hear that they've acted in the best community interest and conservation interest."
Tribune reporters Erin Alberty and Michael McFall contributed to this report.