NEW YORK - New York state officials agreed on Friday to relax harsh 1970s drug laws that required prison sentences for nonviolent drug crimes in favor of laws that will let judges send addicts to treatment programs.

Shanay Outlaw, left, of Manhattan, and Lateisha Corbett, right, of Brooklyn, hold signs during a rally outside New York Governor David Paterson's office to persuade him and legislative leaders to end the remaining so-called Rockefeller-era drug laws, Wednesday, March 25, 2009 in New York. (AP Photo/Mary Altaffer) The new regulations will save the state about "a quarter of a billion dollars" a year in costs for housing prisoners, Senate Majority Leader Malcolm Smith said at a news conference in Albany, the state capital.

The existing laws -- known as the Rockefeller drug laws for Republican Governor Nelson Rockefeller who in 1973 said they were needed to fight a heroin epidemic -- were considered among the nation's stiffest because they required prison terms for offenders and gave judges no discretion in sentencing.

They had been the target of Democrats for years but previous legislative efforts had produced only limited softening.

A joint release from Paterson, the state Senate and Assembly said the agreement eliminates mandatory prison sentences for many first- and second-time offenders and makes them eligible for probation that could include drug treatment.

"This will probably be part of the budget because it does involve some funding," Paterson told reporters.

The Drug Policy Alliance, which has long campaigned against the state's tough drug laws, said New York's prisons hold approximately 12,000 drug offenders, representing nearly 21 percent of the prison population and costing New Yorkers hundreds of millions of dollars every year.

The new laws would create a drug "kingpin" offense for "organized drug traffickers who profit from and prey on drug users." They also would create new crimes for adults who sell drugs to children.

Paterson, saying that as a state legislator from New York City's Harlem neighborhood he saw "first-hand the devastating effects" of drugs, defended spending tens of millions of dollars of federal economic stimulus money to pay for new treatment programs.

He cited the example of a female drug addict who was arrested 60 times over 25 years. After being successfully treated for her addiction, she became a drug counselor.

"Rather than using public dollars while she was in prison, she is spending public dollars to conduct her life," he said.

Judges who preside over specialized drug courts will be able to decide whether to send first and second time offenders to these programs -- even if prosecutors object.

Judge Jonathan Lippman, chief judge of the Court of Appeals, called drug courts "a tough-love regime."

"(Drug courts) not only produce dramatic reductions in recidivism and great savings in social services costs but also serve to reunite families, and most critically (increase) public safety," he said.

Each prisoner costs the state about $45,000 a year and the recession has given the state ever-widening budget deficits.

Drug court judges, who will run the treatment programs, also will be able to dismiss all charges or seal all records if addicts successfully finish treatment. They also can order extra monitoring and tests or penalties for those who fail. So-called "shock" incarcerations are another option.

In addition to fights over whether judges should have to heed prosecutors' objections, there have been clashes over whether people serving sentences handed down under the old laws should now be offered the new treatment options.

Paterson estimated about 1,500 prisoners can apply, adding few would qualify because they either sold drugs for profit or have been violent.

The Board of Parole will now have to consider the new law's reduced sentences in deciding whether to grant parole.