Gov. Mark Dayton and the legislative leaders suing him agreed on Friday to extend state funding for the House and Senate by 90 days while they resolve their legal dispute.

Dayton signed the state’s two-year budget in May but used his line-item veto authority to zero out funding for the House and Senate. Without the agreement reached Friday, as of July 1 the Legislature would have stopped receiving state funds to pay lawmakers, employees and other expenses associated with running the legislative branch of government.

The Republican-controlled Legislature sued the DFL governor in response to his line-item veto, alleging he is violating the Constitution’s separation of powers clause that guarantees the sovereignty of each branch of government.

Dayton wants the Legislature to renegotiate several issues he says he agreed to only under duress: Lawmakers made funding for the Dayton administration’s Department of Revenue contingent on his signing a tax-cut bill that included several provisions he opposed.

The two sides are scheduled to meet in Ramsey County District Court for the first time Monday. The agreement reached Friday — which still needs approval from the judge overseeing the case — includes seeking accelerated review by the Ramsey County District Court and Minnesota Supreme Court to resolve the constitutional conflict quickly.

According to new court documents filed Thursday, a lack of funding means the House and Senate would be forced to shut down operations and furlough hundreds of workers by the end of August. Also, S&P Global Ratings said earlier in June that it was placing Minnesota’s AA+ credit rating on a status it calls “CreditWatch with negative implications.” The agency’s chief concern: whether the state will be able to continue to make payments on the new Senate Office Building and the possibility of a default on that loan.

In a statement, Dayton said that the “agreement will protect legislative employees, who are not to blame for our present disagreement, and Minnesota’s credit rating, which we have worked so hard to restore. I hope that this agreement signals the resumption of good faith negotiations to resolve our policy differences and protect our state’s fiscal integrity.”

Republicans said they will not reopen negotiations on bills that Dayton already signed.

“This will prevent the voice of Minnesotans from being silenced by the governor’s unconstitutional veto,” House Speaker Kurt Daudt, R-Crown, said in a statement. “We’re pleased the governor has recognized the importance of ensuring that Minnesotans continue to have representation in St. Paul.”