The Trump administration has said it will not immediately give $1 billion it revoked from California's high-speed rail project to another project.
The commitment is included in a legal agreement reached Wednesday with the state.
California sued the Federal Railroad Administration on Tuesday over its decision to cancel $929 million in funding. The money is a key piece of funding for California's plan to build a high-speed rail line between Los Angeles and San Francisco.
The agreement says the money won't be awarded elsewhere unless the federal government goes through its typical process for awarding grant money. It says the Trump administration has no current plans to start that process.
The state now won't seek a temporary restraining order halting the federal government from giving the money to another project.