The Obama Presidential Center will not be a part of the presidential library network operated by the National Archives and Records Administration.
The Chicago Tribune reports the move will free the Obama Foundation from amassing an endowment equivalent to 60 percent of the construction cost.
The foundation won't have to adhere to the agency's architectural and design standards. And it won't have to pay NARA to help run an agency-controlled portion of the center.
The freedom from the National Archives could save the foundation tens of millions of dollars, more than making up for the loss of federal funds.
Foundation spokeswoman Amy Brundage characterizes the arrangement with NARA as "mutually beneficial."
The former president has said construction of the center on Chicago's South Side would take about four years.