Update 5/14/2015: This article has been updated to reflect information from additional sources and press releases, including Kevin Sabo, Hans Johnson and Toni Atkins.

Undergraduate tuition for California residents will not go up in the next two years, and the state will make a large investment in the university’s pension system, according to an agreement reached between UC President Janet Napolitano and Gov. Jerry Brown.

The agreement, announced Thursday and reflected in the governor’s May budget proposal, includes a three-year infusion of $436 million into the university’s pension system and continues annual 4 percent increases in other state funding for the next four years. It would guarantee a freeze in undergraduate-resident tuition for another two years but would allow the UC Board of Regents to approve increases in nonresident supplemental tuition of up to 8 percent per year.

This comes after months of conflict between the two figures, which began when the board of regents considered and passed a tuition increase proposal in November.

“Gov. Brown and I were both focused on the future of California as we worked toward this agreement, which will enable the University of California to continue its role as the nation’s preeminent public research university,” Napolitano said in a press release.

She said the university will now turn its attention to the state Legislature, asking it to support the agreement and additional funding for enrollment growth. The new funding will allow the university to lower the student-faculty ratio, among other goals.

Hans Johnson, a senior fellow at the Public Policy Institute of California, said that the funding increases were a victory for the university but that the budget seemed to offer little hope for funding the increase of student enrollment.

“The state needs more college students,” Johnson said. “Anything that could be done for enrollment of more qualified students would be good.”

Brown has said he would not oppose additional legislative funding for enrollment growth, according to a university press release.

The UC Student Association considers the new agreement promising but calls for a funding solution that will benefit all students. Under the current agreement, professional degree supplemental tuition would increase as planned, except at the university’s four law schools.

Kevin Sabo, UCSA board chair, said that the agreement is a win but that it does not hold the university accountable or significantly add transparency and does not represent a major reinvestment from the state.

“Neither the state or the UC is going to step up for students and take responsibility,” Sabo said. “At the end of the day, we threw nonresidents under the bus with the 8 percent increase. We threw professional degree students under the bus.”

Students will still see annual 5 percent increases to the student services fee — an increase of about $48 — to fund mental health services. After the two years of frozen tuition, the agreement allows increases beginning in the 2017-18 school year. The potential tuition increases would be pegged to inflation, and the university says the increases are important for longer-term financial stability.

The university agreed to expand efforts to make sure one-third of its new students are transfer students, already a university goal, and to make clear pathways to a three-year undergraduate degree. The efforts would include the design of pathways, which would be consistent across campuses, for transfer students to prepare for and transfer to 21 of the universities’ top majors. Transfers made up 29 percent of new students admitted in the 2012-13 school year.

The university also agreed to make clear pathways to a three-year degree. The university said it will identify these course pathways for 10 of the top 15 majors on each campus by March 2016.

Johnson said that the course pathways could lead to more efficient education and more open spots but that three years, when including summer sessions, are not much fewer than the usual four.

In exchange for the one-time pension funding, the university agreed to institute a new pension tier by July 2016 that would cap pensionable salary at $117,020. The new cap would affect only new employees and would likely work alongside an additional plan that would have determined employee contributions rather than benefits.

State Assembly Speaker Toni Atkins said it was a positive sign that the university agreed to both flat tuition and pension reforms.

“However, in light of the Assembly’s in-depth review of UC’s budget, it is clear further actions are necessary to ensure UC returns to a model that puts California students first and that more effectively uses the resources the state provides,” Atkins said in a statement.

The state budget subcommittee on education finance will meet to discuss the agreement Monday, and the board of regents will discuss and vote on whether to endorse it Thursday.