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NEWARK, N.J. (AP) — Newark education officials signed a new contract for the district's teachers Thursday, granting performance pay for teachers and allowing educators to review one another.

Superintendent Cami Anderson and Newark Teachers Union president Joseph Del Grosso signed the agreement Thursday afternoon at a Newark school.

Del Grosso and Anderson hailed the contract as groundbreaking, saying it implements innovative programs that will enhance student performance. It is the first district contract in New Jersey to allow for performance pay and peer review.

"It is really a historic time," Del Grosso said.

The contract allows for teachers to receive up to $12,500 in performance pay that is tied to performance reviews. The pay is allocated in three steps. All teachers rated "highly effective" in a performance review are entitled to a $5,000 bonus. If a highly effective teacher works in a school performing in the district's bottom 25 percent, he or she can receive an additional $5,000. Educators who meet those criteria and teach a hard-to-staff subject, like high school chemistry, can earn another $2,500.

"We're banking on that a lot of people get performance pay. That's our goal," Del Grosso said.

The performance pay is funded primarily through a $100 million grant from Facebook founder Mark Zuckerberg. Anderson said the district allocated $100 million — half from public sources, half philanthropic — to fund the entire contract.

The contract also allows for teachers to evaluate one another. Peer reviewers will be in every school and will have an oversight committee.

When lawyers are disbarred, Del Grosso said, the process is done by lawyers. The same should be done for teachers, he said.

"When teachers aren't performing, you know who is going to get rid of them? Other teachers," Del Grosso said.

Teachers will be evaluated by a number of factors, including test scores, a panel of peers and administrators and other student performance benchmarks. Anderson will have the final say if an agreement on a teacher's competence cannot be reached. Teachers who do not perform well can be frozen at a pay grade, but will have the opportunity to receive mentoring and move up the following year.

The deal also includes $31,000 in retroactive pay hikes for teachers and increases teacher salaries earlier in their careers.

Newark teachers have been working without a contract since 2010, and the district's nearly 4,000 student school system has been under state control for decades.

A high-profile bunch sat at the bargaining table for this contract, including New Jersey Education Commissioner Christopher Cerf and American Federation of Teachers President Randi Weingarten. Gov. Chris Christie, who overhauled teacher tenure in August and has tangled with teachers unions, gave his blessing to the contract and met with Del Grosso and Anderson.

"Clearly some of this is being paid for by philanthropy," Weingarten said in an interview. "But it's both an opportunity and it's a burden. Because what it means that the parties, the district and the union have to work really hard to make sure that this gets implemented correctly."

The contract is tangible proof of the relationship between Anderson and Del Grosso, who represent the new and the old guard in Newark's school system. Anderson, who called Del Grosso her "partner in crime," was appointed by Mayor Cory Booker last year. She quickly shook up the school system, extending the school day, firing principals and consolidating schools.

Del Grosso has spent 42 years in the Newark schools as a teacher and union head. His office is filled with Newark memorabilia. Del Grosso said he was wary of Anderson, who came from New York City, at first, but they have become allies, committed to bringing innovation to Newark's schools.

"She threw a few rocks, I threw a few rocks, but later we found out that rocks hurt. So later we decided we better sit down and talk," Del Grosso said. "We have found that we like each other and we think that we can work together to promote what we all want, success for kids."

Teachers will vote on whether to ratify the contract Oct. 29.