The territorial government approved the agreement Tuesday, which will see four partners each take 25 per cent ownership in the company.
The partners are Arslanian Cutting Works, Basal Diamonds, Olympic Diamonds and a fourth company, the name of which is being withheld for reasons of confidentiality, Finance Minister Floyd Roland said.
A letter of intent was signed by representatives of the government and Arslanian on Tuesday.
In the deal, the shareholders will pay out the existing $9.1 million loan from Royal Bank.
In return, the government agreed to provide a loan guarantee for new financing supplied by a major financial institution, said Roland.
Under the plan, the partners have given the territorial government personal guarantees for security.
On Monday, Ronen Basal, president of Polar Ice Diamonds, a subsidiary of Basal Diamonds, said he had a deal with the territorial government.
"The deal is done. We signed off on it and the government signed off," Basal said.
It is a quick reversal of fortunes for Arslanian.
On June 4, the territorial government appointed an interim receiver for both Arslanian Cutting Works and Sirius Diamonds.
The government was on the hook for loan guarantees worth $9.1 million for Arslanian and $8 million for Sirius.
On June 18, the NWT Supreme Court ordered that the interim receivership of Sirius Diamonds Ltd. and Sirius Diamonds (NWT) Ltd. continue indefinitely.
On the same day, the court extended an interim receivership order on Arslanian until June 28.
The government's desire to protect the public purse was "100 per cent right," said Basal.
"We came in with strong personal guarantees and marketing, and that's how we concluded the deal. The most important thing is for the government to feel at ease," said Basal.
-- With files from Brent Reaney