The UP Shia Waqf Board is drafting the terms and conditions of the agreement, its chief Waseem Rizvi said.
"It has been amicably decided that no new mosque will be built in Ayodhya or Faizabad. The Shia Waqf board will identify a piece of land in a Muslim-dominated area and inform the government," he said.
The Parishad had objected to the construction of a mosque in Ayodhya or Faizabad. This issue was resolved by UP Shia Waqf Board chief Rizvi during discussions, Parishad President Narendra Giri told mediapersons after a meeting here.
Ram Janambhoomi Trust president Mahant Nritya Gopal Das was also present in the meeting.
"We had a discussion with main party Dharma Das and others also. After signing of the agreement, it will be very soon submitted in the apex court," Giri said.
Mediation is not required in the case now, he said.
"Those in favour of temple construction and the Shia Waqf Board have completely agreed on this. We had discussed it with almost all the parties in the case," he said.
The decision will be conveyed to the Supreme Court by December 5, a day before the 25th anniversary of the demolition of the medieval-era structure.
Rizvi claimed as the Sunni Waqf Board has lost the case of its registration in several courts, only the Shia Waqf board has a right to the mosque.
Since it is for an amicable solution of the temple-mosque issue, people from any community, including Sunni organisations, can participate in the talks but those with "negative approach" will not be allowed, the Shia Waqf board chief said.
"We do not want to complicate this issue any more," Rizvi said.
The Sunni Waqf board was registered in 1944, he said.
The Supreme Court, a High Court and a civil court had declared its registration as invalid, he added.
"Since their registration has been declared invalid, they (Sunni board) have no right over the mosque," Rizvi said.
The Lucknow bench of the Allahabad High Court had in 2010 ruled a three-way division of the disputed 2.77-acre area at the Ram Janambhoomi-Babri masjid
site in Ayodhya.
The three-judge bench of the high court, by a 2:1 majority, had said the land be partitioned equally among three parties -- the Sunni Waqf Board, the Nirmohi Akhara and Ram Lalla.
The Supreme Court on March 21 suggested an out-of-court settlement of the land dispute at Ayodhya, observing that issues of "religion and sentiments" can be best resolved through talks.
The Shia Central Waqf Board has impleaded itself as a party in the Ayodhya case by submitting a 30-page affidavit to the Supreme Court on August 8. It has staked claim to the Babri mosque, maintaining that it was a Shia mosque.
On August 11, the Supreme Court had said it will commence the final hearing in the long-standing Ram Janmabhoomi-Babri Masjid
title dispute from December 5.