Waterton has been pushing for a board overhaul for months in an increasingly bitter battle, saying the miner had traded at a material discount to its peer group, needed "adult supervision" and filed a lawsuit last month that Hudbay described as frivolous.
In a joint statement on Friday, the pair said only 11 agreed nominees would be considered for election at the meeting, and Hudbay would then start a search for a new chair.
Hudbay said chair Alan Hibben would continue in the role until a successor was appointed and he would remain on the board until the 2020 AGM.
"Hudbay is pleased to have reached an agreement with Waterton that is in the best interests of shareholders," Hibben said.
Waterton's chief investment officer Isser Elishis said the company was confident the refreshed Hudbay board was well-positioned "to add value and deliver long-term value for all shareholders".
The 11 agreed nominees are Hibben, Carol Banducci, Igor Gonzales, Alan Hair, Richard Howes, Sarah Kavanagh, Carin Knickel, Colin Osborne, and Waterton nominees Peter Kukielski and Daniel Muñiz Quintanilla, plus its nominee David Smith whom Hudbay had already agreed to.
Waterton is Hudbay's second-largest shareholder, owning an aggregate 12.09%, behind investment manager Letko, Brosseau & Associates which holds 13.4%.
Hudbay had reported lower copper, gold, silver and zinc production from its Manitoba operations for the March quarter but said it was on track to achieve full-year guidance.
Hudbay shares have risen from a 52-week low of about C$4.50 in October to a $10.42 peak last month.
They closed up 3% on Friday to $8.86, valuing it at $2.3 billion.