The governor and Oklahoma's Republican-controlled Legislature have reached an agreement on a nearly one-half of 1 percent cut to the personal income tax rate.
They also agreed to eliminate four of the seven tax brackets.
House Speaker Kris Steele, Senate president Pro Tem Brian Bingman and Gov. Mary Fallin announced details of the plan Thursday, flanked by dozens of legislators.
That means the new tax rate for the top bracket will affect individuals who make more than $7,500 per year.
Reducing the state's income tax has been a top priority for Fallin, who says lower income taxes will make the state more attractive to businesses and industries.
Fallin initially wanted a deeper tax cut, but legislators resisted the elimination of tens of millions of dollars in tax breaks needed to pay for the plan.
Democrats have promised to oppose any cuts to the income tax, saying it will jeopardize funding for critical state services like education and public safety.