As Hachette continues its stalemate with Amazon over e-book sales terms, Simon & Schuster has reached a new agreement with the e-tailer. Among other things, the new deal will allow S&S to set the prices on its e-books, marking a return to the agency model.

Although neither side would publicly confirm the deal, on Monday afternoon a source with knowledge of the agreement said that S&S has signed a new contract, impacting the of both its digital and physical books, that will go into affect January 1, 2015.

The multi-year agreement moves the e-book discount policy back towards the original agency plan, and will let S&S set the e-book prices while giving Amazon room for some discounting. The deal is believed to keep the amount of money authors earn from the sale of e-books at current levels.

In July, Leslie Moonves, CEO of S&S parent company CBS, said at a media conference in Colorado that S&S was in negotiations with Amazon. While he declined to provide details, it was widely assumed the talks were over new sales terms. The agreement between S&S and Amazon is likely to increase the pressure on the Hachette Book Group to end its long-running dispute with Amazon over e-book terms.