Trump late on Friday signed the bill, which will provide funding through February 15 and end the longest government shutdown in US history.
Earlier in the day, in an apparent about-face on his demand for a wall, Trump announced that a deal had been reached.
"I am very proud to announce today that we have reached a deal to end the shutdown and reopen the federal government," Trump said at the White House.
Trump said in the meantime a bipartisan committee of lawmakers would meet to discuss the nation's border security needs.
"In a short while, I will sign a bill to open our government for three weeks until February 15. I will make sure that all employees receive their back pay very quickly, or as soon as possible," Trump said.
The president first allowed the partial shutdown to go into effect in December after Democrats refused to approve the billions of dollars in funding for a wall along the US-Mexico border.
Pressure mounted on Trump as the shutdown was threatening the economy and left hundreds of thousands of federal workers missing a second paycheque on Friday.
Earlier on Friday, the Federal Aviation Administration reported flight stoppages and flight delays at international airports in New York, Philadelphia and Newark, among others.
In recent weeks, Trump had dug in on his demand for a wall, but leading Democrats refused to budge, offering funding for border security other than a wall.
On Friday, however, Trump said the US does not need a concrete border wall along the entirety of the southern border.
"We do not need 2,000 miles of concrete wall from sea to shining sea. We never did," Trump said.
"We never proposed that," he added.
"We never wanted that because we have barriers at the border where natural structures are as good as anything that we could build."
Trump added, "Our proposed structures will be in predetermined, high-risk locations that have been specifically identified by the Border Patrol to stop illicit flows of people and drugs."