The City of Johannesburg has reached an agreement with local informal traders on business by-laws, the city said on Tuesday.
The agreement was reached at a meeting on Friday.
"The urgent meeting was convened following allegations of abuse of power by the metro police officers, reported to the city by the SA National Traders' Retail Alliance," it said in a statement.
"The meeting was attended by senior officials from the city and the Johannesburg metropolitan police department, as well as the majority of organised informal trader organisation leadership."
Part of the agreement stipulated that the city and trader associations work together to discourage illegal trading, and to ensure that traders were allowed in demarcated areas only if they had permits.
"The city committed that as many as possible smart cards, [which are] used as city permits... will be printed," it said.
"The city [also] agreed that it wants to use enforcement as the last resort in dealing with illegal trading."
It said an informal trading forum regularly met with the city to address ongoing trading issues.
"The purpose of the informal trading forum is to act as a coherent informal sector representative in resolving the informal sector issues raised by traders," the city said.
"Informal traders are encouraged to utilise formal structures, such as the informal trading forum, to raise all their concerns, and the city will always avail its leadership to discuss issues with informal traders."