Prime Minister Benjamin Netanyahu has reached a compromise with Migron residents over the removal of the illegal West Bank outpost, a source close to the talks told Ynet on Monday.

The agreement would require Migron residents to vacate the outpost and move into buildings that will be constructed nearby. Meanwhile, the outpost's structures will be converted into a farm instead of being razed.

The settlers' new homes are to be built approximately two kilometers (1.2 miles) from the outpost, on Israeli land.

On Monday evening, the sides were drafting a contract that would stand in the High Court of Justice, which ruled recently that the settlement should be dismantled by the end March.

'Likud is with settlers'

The State also agreed that if the settlers manage to prove the Migron is not built on private land that belongs to Palestinians, they are to be allowed to stay there.

"I am glad that the prime minister didn't give in to the defense minister's plans," said MK Danny Danon, who backed the compromise. "We were elected to build, not to destroy. The Peace Now activists who wanted to see blood will have to face disappointment.

"Likud is with you," he said, addressing the outpost residents. "The Jewish settlement in Judea and Samaria is flesh of the party's flesh."

Itai Hemo, a resident and a spokesman for the settlement, lauded the new compromise.

"Over the past few months we have been collaborating with ministers and Knesset members to find a solution to the issue," he said. "It was clear to us that it's just a matter of proper wording. Through Migron, we will also find a solution for other settlements, which have been unjustly targeted with High Court of Justice warrants courtesy of Peace Now."

The negotiations between the State and the settlers have taken place for over a year, unsuccessfully. On Sunday, Netanyahu urged the settlers to accept the latest compromise.