However, after the outbreak of the Mexican–American War in April 1846 diverted U.S. attention and military resources, a compromise was reached in the ongoing negotiations in Washington, D.C., and the matter was then settled by the Polk administration (to the surprise of its own party's hardliners) to avoid a two-war situation, and another war with the formidable military strength of the United Kingdom.

Some US senators such as Charles Gordon Atherton and Benning Wentworth Jenness were combative and were in favor of rejecting British proposals to negotiate.

On June 12, the Senate voted 38–12 recommending that President Polk accept British proposals to negotiate this boundary.

[5] The treaty was signed on June 15, 1846, ending the joint occupation and making Oregonians south of the 49th parallel American citizens, with those north of it becoming British.

When the Colony of British Columbia joined Canada in 1871, the 49th parallel and marine boundaries established by the Oregon Treaty became the Canada–US border.

The dispute was peacefully resolved after a decade of confrontation and military bluster during which the local British authorities consistently lobbied London to seize back the Puget Sound region entirely, as the Americans were busy elsewhere with the Civil War.

According to American historian Thomas C. McClintock, the British public welcomed the treaty: Frederick Merk's statement that the "whole British press" greeted the news of the Senate's ratification of Lord Aberdeen's proposed treaty with "a sigh of relief" and "universal satisfaction" comes close to being accurate.

Though a few newspapers had at least mild reservations, completely absent was the strong condemnation that had greeted the earlier Webster-Ashburton Treaty (which determined the northeast boundary between the United States and Canada).