The federal Crown-Indigenous relations minister and the chief of the Musqueam Indian Band have initialled an agreement they say brings the band one step closer to self-governance.

Minister Gary Anandasangaree told a ceremony on Friday afternoon that signing the Musqueam self-government agreement is a "significant milestone" and a "powerful step" toward self-determination.

He said once the agreement is in effect, it will revitalize the Musqueam Nation's inherent right to self-government and restore the community's ability to create laws, programs, services and economic opportunities on the nation's own terms.

"The self-government agreement will establish areas of jurisdiction for the Musqueam Nation in a wide range of subject matters, including governance, land, natural resources, environment, fish membership, cultural matters, language, education, financial management and accountability, and health and social services," Anandasangaree said.

Musqueam Chief Wayne Sparrow said being self-sufficient and looking after the community's affairs has always been their vision.

Rosalind Campbell, a former Musqueam councillor who worked on the agreement, said it's the first self-government agreement that implements aspects of the United Nations Declaration on the Rights of Indigenous Peoples.

"It allows us to create our laws that incorporate our language and culture, our values," she told the ceremony.

"We get to reflect our values in our laws, and I'm so excited and look forward to that part of the work when we get there."

Musqueam has a population of more than 1,400 people with more than 50 per cent living on reserve.

A joint statement said the next steps are for the Musqueam to launch community engagement and begin the process of ratifying the self-government agreement among its membership.

If approved, the agreement will need federal legislation to give it legal effect.