CHICAGO — In a deal brokered by federal authorities, Chicago Mayor Richard Daley and officials from American Airlines and United Airlines announced an agreement Monday that allows the city to begin work on $1.17 billion worth of a remaining $3.36 billion of expansion projects at O’Hare International Airport.

Under the agreement, Chicago can proceed with construction of one new runway and some land improvements. The city agreed to put off other projects that are part of the completion phase of the O’Hare Modernization Program, and the airlines will drop their lawsuit challenging the city’s authority to proceed with projects without their go-ahead.

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