Yale will return all of the Inca artifacts it has held for nearly 100 years to the nation of Peru, according to a memorandum of understanding signed by University President Richard Levin and the Peruvian minister of foreign relations Tuesday.

All of the artifacts — of which there are about 40,000 by Peru’s estimate, and about 4,000 according to Yale — will be returned before Dec. 31, 2012 at the latest. Items in a condition suitable for museum display will be returned in time for the centennial of Yale archaeologist Hiram Bingham III’s 1898 scientific discovery of Machu Picchu in July 2011, the memorandum said. Yale will be responsible for all expenses relating to the artifacts’ return to Peru, according to the memorandum.

“We’re very pleased with what we’ve been able to accomplish this time,” Levin said in an interview Sunday.

Yale and Peru previously signed a memorandum of understanding to return the artifacts in September 2007. That agreement, which was governed by Connecticut law, is effectively replaced by the new accord, which is governed by Peruvian law.

“The new agreement … does designate that Peruvian law will apply, which is fitting, since all of the material will be moved to Peru on a short timetable,” Yale Vice President and General Counsel Dorothy Robinson said in an e-mail to the News Sunday night.

In the 2007 memorandum, Yale retained “usufructuary rights” to research and exhibit some non-museum quality pieces for up to 99 years. But Robinson said Yale did not seek “usufructuary rights” to the artifacts in the new memorandum, opting instead to participate in cooperative research on the artifacts in Peru. Other universities including Yale will be allowed to conduct research on the relics, according to the memorandum.

The artifacts will be housed at the National University of San Antonio Abad in Cusco, Peru, according to the memorandum. The memorandum states that the center will be built with financial support from the Peruvian government. Levin said Yale will work with the university in Cusco to establish a museum and research center dedicated to the artifacts, adding that details of the deal to found the center are still under negotiation.

Still, Levin said that the artifacts may return to Yale for short exhibitions of up to two years, as allowed under Peruvian law.

“We will be able to ensure that the objects will be well taken care of and will be accessible to scholars,” Levin said, adding that these are “conditions that were very important to us.”.

In April 2008, Peru objected to Yale’s “usufructuary rights” over some of the relics and rejected the accord. Peruvian representatives then sent a counterproposal to Yale requesting the immediate return of Yale’s entire collection, and followed with a lawsuit in December 2008 for the artifacts’ return.

According to the memorandum, Yale and Peru will ask the United States District Court of Connecticut to suspend the case until the terms of the accord are carried out. At that time, the two parties will request the termination of the legal proceedings. Yale’s lawyers filed a motion to dismiss the lawsuit Jan. 9, arguing that the statute of limitations had expired since Peru had far surpassed the three-year period in which it could legally recall the artifacts.

In the last two months, Peruvians have demanded the artifacts’ return in a series of demonstrations and marches. Despite this, Levin said recent outcry did not play a significant role in Yale’s decision to sign the new agreement, adding Yale has long known of Peru’s “tremendous interest … to work out some solution to this problem.”

A delegation from Yale consisting of former President of Mexico and current faculty member Ernesto Zedillo, Director of the Peabody Museum Derek Briggs and anthropology professor Richard Burger traveled to Peru Nov. 19 to negotiate with Peruvian president Alan Garcia, Levin said told the News Nov. 20. In the past, Yale representatives have never dealt with such high-ranking members of the Peruvian government, he added.

In a Nov. 20 press release, Sen. Chris Dodd — who publicly expressed his support for the artifacts’ return to Peru in June 2010 — said he applauds Yale’s decision.

“These artifacts do not belong to any government, to any institution, or to any university — they belong to the people of Peru,” Dodd said.

The artifacts are currently housed at the Peabody Museum in New Haven.

Jordi Gassó contributed reporting.