Princeton University has agreed to contribute nearly $22 million over the next seven years to the town of Princeton.

The deal was announced Thursday and is set for consideration by the town government's approval on Monday.

The university and town officials frame it was as a way to resolve an age-old issue in college towns where much of the land is university-owned and thus tax-exempt.

Under the deal, the Ivy League school would pay an additional $2.6 million toward several specific departments, including a storage facility for public works equipment and a new first-aid building.

The school would also make yearly unrestricted payments and would continue paying property taxes on graduate student housing that could be tax-exempt.

The University will also donate to the municipality for its use the University-owned parking lot on Franklin Street that has been valued in the range of $1 million.

Princeton Council President Bernie Miller says the seven-year agreement provides fiscal stability for the university and the municipality.

The announcement comes just three days ahead of Communiversity, the annual town-event held on Nassau Street. This year's Communiversity will be held Sunday, April 27 from 1-6 p.m.

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The Associated Press contributed to this report