The 15-year agreement has been signed with the Federal Attorney General of Brazil, the states of Espirito Santo and Minas Gerais and other public authorities to restore the environment and communities affected by incident on 5 November 2015.
The agreement provides a long-term compensation framework for responding to the impact of the tragedy, BHP said.
BHP Billiton CEO Andrew Mackenzie said: "This agreement is an important step forward in supporting the long-term recovery of the communities and environment affected by the Samarco dam failure.
"It provides a platform for the parties to work together to support the remediation of affected areas."
The companies said that they have set up a fund worth BRL4.4bn ($1.12bn) which will be distributed through 2018.
Samarco, Vale and BHP plan to establish a foundation, which will focus on developing and executing environmental and socio-economic programs to remediate and provide compensation for the damage.
Under the reparatory programs, the environment, local communities and the social condition of the affected areas would be restored while the compensatory programs will to provide compensation where remediation is not possible.
BHP said that the amount of annual contributions for 2019, 2020 and 2021 will vary between a minimum of BRL800m ($200m) and a maximum of BRL1.6bn ($400m).
The agreement, which is subject to court approval, is renewable for periods of one year successively until all obligations have been performed.
The deal will settle the civil public claim commenced on 30 November 2015 by the Brazilian Authorities against the companies. The claim sought the establishment of a fund of up to BRL20bn ($5.1bn) in aggregate for clean-up costs and damages as a result of dam failure.
