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BOSTON — Boston dropped its bid to be considered a host community for a $1.2 billion gambling resort project proposed for the banks of the Mystic River, the state’s gambling commission announced Friday.

Boston will instead accept the status of a surrounding community, which under the state’s 2011 casino law will allow it to negotiate for compensation from developer Steve Wynn, but will not give the city or its residents a direct say in whether the project goes forward.

The agreement represents a significant victory for Wynn, a prominent Las Vegas casino operator. Had Boston been designated a host community, Wynn would have been forced to negotiate an agreement with Boston Mayor Thomas Menino, who strongly supports a competing casino plan in the city’s East Boston neighborhood.

Even if an agreement with the mayor had been reached, it would have required approval from voters in Boston’s Charlestown neighborhood who have expressed concern about traffic and other impacts from Wynn’s casino proposal.

While Boston officials conceded that the proposed casino site at the former Monsanto chemical plant was largely situated in the neighboring city of Everett, they had argued that a small sliver of land on the site on the northern side of the river was actually part of Boston – meaning that the city would have the right to argue for the more powerful designation of host community.

At a meeting of the Massachusetts Gaming Commission on Wednesday, former Gov. William Weld, representing Wynn, said the developer may have abandoned his casino proposal had Boston been designated as a host community. Weld presented maps and documents that he said proved all of the land on which Wynn planned to develop his resort was in Everett.

In a joint statement distributed at Friday’s commission meeting, Boston officials and Wynn said they were no longer seeking to have the commission hold a hearing to determine whether Boston should be a host community.

“Based on the new information provided at Wednesday’s public meeting, the parties have agreed to begin discussions about Boston’s status as a surrounding community to address the impacts that Wynn’s proposed gaming establishment would have on Boston and the Charlestown community,” the statement read.

Stephen Crosby, the commission chair, said he was “delighted” the dispute had been resolved.

The Wynn proposal, which has been approved by Everett voters, is likely to compete with Suffolk Downs for the sole eastern Massachusetts resort casino license. Also in the running is a group led by Connecticut’s Foxwoods casino that has proposed a casino in Milford.

In a separate development on Friday, the gambling commission voted to approve the transfer to Penn National Gaming of a host community agreement that had been reached between Plainville town officials and the current owners of the Plainridge harness race track.

The move clears the way for a vote by town residents on the agreement to go forward next

The track’s current owners, Ourway Realty, had been disqualified by the commission from bidding for the state’s sole slots parlor license after a background check turned up financial improprieties.

Penn National – unsuccessful in two previous bids to enter the Massachusetts gambling market – announced last week it had signed an option to purchase Plainridge and said it would honor the terms of the agreement that had been reached between Ourway and the town.

The commission said it would allow the arrangement with Penn National despite expressing concern that it might be a technical violation of the state gambling law that requires at least 60 days between when an applicant signs a host community agreement and the referendum. Critics said since the applicant has changed, the waiting period should start anew.

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