The action came after a weeklong teachers' strike that shut down classes for the majority of the state's 1.1 million public school students.
Despite the call to an end of the walkout, many teachers' strike organizers says the Arizona budget approved by lawmakers and Gov. Ducey "falls are short" of what is needed.
The plan offers raises and some school funding sought by teachers who have walked out of their classrooms in a historic statewide strike that's closed schools for six days.
Governor Ducey's signature awarded teachers a 9 percent raise in the fall and 5 percent in each of the next two years. Those increases are in addition to a 1 percent raise granted last year.
I just signed all the remaining budget bills. From teacher raises and increased classroom funding, to protecting our veterans and rural communities, this bipartisan budget puts Arizona's top priorities first. Thanks to all who helped make it happen.
Teachers did not get everything they wanted, but they won substantial gains from reluctant lawmakers. "The educators have solved the education crisis! They've changed the course of Arizona" Noah Karvelis of Arizona Educators United shouted to several thousand cheering teachers. "The change happens with us!"
Many organizers, however, say the budget fails to address a lack of overtime compensation and money for classroom supplies.
Arizona Education Association President Joe Thomas said Thursday that the governor and some members of the Republican-controlled Legislature largely ignored many demands of educators, who will "remember that in the upcoming election."
Thomas says educators should focus on a campaign for a November ballot measure that would raise education funding from an income tax increase on wealthy residents.
Helen Hoffman, a counselor at Phoenix Union High School, said she was "excited" about the end of the strike.
"I'm worried about my students. I'm ready to go back," she said.
Elizabeth Ruiz, an eighth-grade math teacher in the Phoenix suburb of Gilbert, expects her school to reopen Friday.
"It's middle-schoolers, so it's a tough age. But I'm ready to see them," she said.
Education cuts over the past decade have sliced deeply into Arizona's public schools. Teachers wanted a return to pre-recession funding levels, regular raises, competitive pay for support staff and a pledge not to adopt any tax cuts until per-pupil funding reaches the national average.
The new funding package provides schools will a partial restoration of nearly $400 million in recession-era cuts, with a promise to restore the rest in five years. Other cuts remain in place.
Minority Democrats mainly voted against the budget plan, drawing criticism from Republicans.
"You know, talk is pretty cheap -- it's your vote that counts," Republican Rep. Anthony Kern said. "If Republicans voted with Democrats tonight, you would be walking away with zero."
Democratic Rep. Reginald Bolding urged lawmakers not to congratulate themselves for easing the same crisis they created.
"You can't set a house on fire, call 911 and claim to be a hero. And that's what this body has done," Bolding said.
One Republican lawmaker upset about the strike proposed amendments to make it illegal for teachers to espouse political beliefs at work, to require the attorney general to investigate schools that allow political activity and to bar schools from closing during a walkout.
"There are hundreds of families contacting me that are harmed financially, occupationally," an emotional Rep. Kelly Townsend said.
Rep. Mitzi Epstein, a Democrat, tried and failed to win support for an amendment that would mandate a 250:1 ratio for students to school counselors. Epstein said the bill could help prevent suicide and bullying and improve academic performance.
"Not only is school not fun anymore, but it's scary," she said.
The Republican governor, however, called the bill "a real win" for teachers and kids in from his office as he signed it Thursday morning after all-night legislative sessions by the GOP-controlled House and Senate.