The Great Bear Rainforest on the Pacific coast of British Columbia is home to many animals and ancient trees.
Logging will be banned across a huge area of the forest.
Environmental campaigners say the deal is a model for resolving similar land-use disputes around the world.
The forest is inhabited by the spirit bear, a rare sub-species of the black bear with white fur, and is also home to 26 aboriginal groups, known as First Nations.
"The Great Bear Rainforest, there's no question, it's a jewel in the crown of magnificent landscapes in British Columbia," Premier Christy Clark said on Monday.
She said the "landmark agreement" would protect old and second-growth forest, while simultaneously providing economic opportunities for aboriginal people  and local communities.
The province is expected to sign the new measures - which have been drafted after 10 years of often tense negotiations between the various concerned parties - into law in the spring.
The agreement bans logging in 85% of the rainforest and brings an end to hunting of the grizzly bear within First Nations territories. It also abolishes hunting in the region for the spirit bear, also known as the kermode bear.
The remaining 15% of the ancient forest will be subject to stringent standards applied elsewhere in North America for commercial logging.
The deal has been ratified by 26 aboriginal tribes that live alongside British Columbia's  coast, several environmental groups and five forestry companies.
How salmon keep the forest thriving
Indigenous tribes, timber firms and environmental groups in western Canada have welcomed a deal to protect one of the world's largest remaining tracts of temperate rainforest.