The plan sets out the key outstanding issues for shareholders, and an agreed basis for funding the project, Rio Tinto said in a statement.
The US$5.4 billion (£3.5 billion) copper mine has been the subject of a long-running dispute between Rio Tinto and the Mongolian government.
The government owns 34% of Oyu Tolgoi mine, while Turquoise Hill Resources division owns the rest. Development of the mine had been on hold since 2013 because of disputes between the owners.
Rio Tinto chief executive Jean-Sébastien Jacques said: "Our joint announcement today reflects tremendous leadership by all parties and paves the way for work to resume on the underground development, which is expected to deliver significant value to shareholders. The resolution of the outstanding issues reinforces the principles of the Investment Agreement signed in 2009, which underpinned the US$6 billion invested in Oyu Tolgoi to date, and provides a clear and stable framework for the future."
Mongolian Prime Minister Chimediin Saikhanbileg said: "Mongolia is back to business. Oyu Tolgoi is a world-class copper-gold asset and its further development is of great economic significance for Mongolia. We have finalised a way forward with our partners which re-establishes the foundations of a new and constructive relationship based on mutual trust and our joint long-term commitment to Mongolia’s growth."
"Unlocking Oyu Tolgoi’s underground mine will have a significant impact on the Mongolian economy, which will benefit Mongolian citizens for generations to come," he said.
Earlier this year, Saikhanbileg held a referendum by text message, asking Mongolians whether they wanted him to press ahead with major projects like Oyu Tolgoi or impose more austerity. Out of 302,008 votes, 56.1% supported further development, including Oyu Tolgoi, while 43.9% were in favour of "strengthening economic discipline".