The agreement came hours after activists sued to stop the city from moving ahead with plans to raze buildings without court hearings or owners' consent.
A hearing is set for Jan. 6 before a state judge.
Last week, city officials announced their intention to demolish within weeks about 2,500 buildings that inspectors found to be dangerously unstable after they were flooded by Hurricane Katrina.
The city claims it has the authority to act without the approval of the owners or a court order because the structures pose an imminent threat. But the plaintiffs said the city is overstepping its authority and violating the law.
Bill Quigley, a Loyola University School of Law professor and the plaintiffs' lawyer, said that Wednesday's agreement suggests the city may be inclined to "do the right thing for these people" and adopt a "fair, legal and constitutional" demolition process that takes into consideration the wishes of property owners.
Brenda Breaux, a city attorney, declined to discuss the dispute.
The plaintiffs also charge that the inspection process that determined which buildings are unsafe was flawed. In fact, several of the plaintiffs in the lawsuit contend their buildings were mistakenly red-tagged for demolition.
The city says it placed red stickers on 5,534 buildings in all on New Orleans' east bank. Greg Meffert, who oversees the city's department of safety and permits, said the plan was to inspect 3,000 of those buildings a second time to make sure they need to be brought down.
The demolitions would be overseen and paid for by the Army Corps of Engineers, which
The vast majority of the city's homes — about 68 percent — were coded yellow, or judged to be sound but with structural damage.