Under the agreement - and with the city's subsidy - the schools now will save an estimated $1.2 million, said School Reform Commission Chairman Pedro Ramos.
While Ramos, Mayor Nutter and a nearly full slate of Council members cheered the deal on Thursday, the schools still need to cut another $40 million by June - and next year's budget could be even more grim.
"The School District will continue to face significant funding challenges," Nutter said. "That means we're going to have to be that much more creative in our efforts to do the kind of programming that we want."
About 12,000 people - mostly children - would have been affected by the closures, which would have brought a premature end to athletic leagues, drama programs and other activities.
Council President Darrell L. Clarke said he thought that would send "mixed messages" at a time when city leaders are stressing the need for youths to be involved in positive activities.
"This would have been devastating for the kids," Councilman Bobby Henon said of the closures. "Thousands of kids who otherwise would have been on the streets in this city, blighted with crime."
The deal keeps the 48 locations open until 9 p.m. on weekdays and for up to eight hours on Saturdays through March 17. Recreation officials believe that will enable all 154 groups to finish their seasons.
Some teams may have to share space for practices, and groups may have to move their events to new times and locations.
"A combination of all those things brought us to this conclusion without hurting any groups," said Leo Dignam, the deputy recreation commissioner for programs. "We're able to fit . . . I'm going to say everybody, because I haven't found one we haven't been able to place."