According to the settlement, the city will suspend the ban and drop an appeal of an injunction against the new rules.
The order requires the sides and their lawyers to discuss a resolution to the meal controversy and related issues.
They will be required to submit reports to the court every 90 days.
The dispute over serving outdoor meals erupted in the spring when the city's Department of Health issued new guidelines for food handling, and the Department of Parks and Recreation issued a ban on handing out free food in parks.
Different groups hand out food every day of the week along the Benjamin Franklin Parkway, drawing hundreds of people at times.
Many critics said the new rules were timed to the spring opening of the Barnes Foundation art collection. They saw the ban as an attempt to remove the sight of hungry poor people lining up for food from the city's main cultural corridor.
Paul Messing, an attorney for the church groups, said this agreement should be seen as more than just a new round of talks about outdoor meals and as a chance to reexamine the problem of chronic homelessness.
"Mayor Nutter has shown a lot of leadership on the issues of poverty, hunger, and homelessness," Messing said. "This demonstrates the mayor's commitment to the poor and hungry and homeless."
He said the hope was that the talks would lead to better ways to distribute not only food, but services for the poor and homeless.
"In Philadelphia, more than just about any other big American city, the goal of ending homelessness is attainable," Messing said.
Since the controversy started, Nutter has convened a task force to examine the outdoor serving of food. A report released in August makes recommendations such as creating an indoor space for any group to use to provide free meals to people.
Many advocates for the poor agree that it is more effective to reach out to people and address their needs in an indoor setting than out on the streets.
The task force report, said Mark McDonald, a spokesman for Nutter, "pretty clearly says that we are trying to address the long-term issues of the hungry and poor."
One of the plaintiffs in federal case, Brian Jenkins, founder of the Chosen 300 ministry, a volunteer network of Christian churches that serves both indoor and outdoor meals to the poor, said the agreement was a start.
"The problem is not the homeless," Jenkins said. "The problem is homelessness."
Contact Jennifer Lin at 215-854-5659 or email@example.com, or on Twitter @j_linq.