A pair of bills proposed by lawmakers would have banned direct auto sales and required manufacturers to use franchise auto dealers. This would have shuttered Tesla's New York stores because the company uses a direct-sales model.

The agreement — which the Journal said was reached by New York Gov. Andrew Cuomo, Tesla, auto dealers, and "legislative leaders" — will require any new stores in the state be opened up under a "strengthened dealer franchise law."

But Tesla's existing stores would be grandfathered in and allowed to continue to operate. As a result of the deal, the Journal said legislators agreed to remove language from the bill that would have closed Tesla's stores. 

Cuomo told the Journal the deal was a "win-win for consumers, for the franchised auto dealers, and manufacturers who play such a vital role in New York's economy, and for cutting-edge companies like Tesla."