It appears New York State has reached a deal with the Federal Highway administration about hundreds of "I Love NY" signs.

Federal officials said the signs violate regulations and could be distracting to drivers.

The state disagreed, but faced a potential loss of $14 million in federal funding.

With a deadline to remove the signs looming, the Department of Transportation Commissioner Paul Kara and Thruway Authority Director Matthew Driscoll say the two sides struck a deal.

“We have reached an agreement to launch an innovative experimental project to allow tourism signage to highlight cultural, historic, and other significant state attractions off the highway system," Kara and Driscoll say in a joint statement released Friday afternoon. "This is a win-win for all parties and we thank our federal counterparts for their cooperation. We will submit a final plan on this new project in the coming months." 

They add that the current signs have been up for five years and that a new advertising campaign will be rolled out and will be "profiled in various media outlets, as well as easy-to-download apps that will coordinate with road signage. Regional introductory signs — referred to as motherboards — and follow-up specific attraction signs will be part of the effort."  

The state will submit a final plan in the coming months.

It's unclear when the current signs will come down, but the federal aid is no longer threatened.