HARTFORD, Conn. — Gov. Dannel P. Malloy announced Tuesday he has signed a bipartisan state budget to finally stop Connecticut’s lengthy, fiscal stalemate, but he used his limited line-item veto power to nix portions of the legislation related to a problematic tax on the state’s hospitals.

“After 123 days without a budget, it is time to sign this bipartisan bill into law and continue the steady and significant progress our state has made over the past several years,” Malloy, a Democrat, said in a written statement, adding how Connecticut’s families and businesses “deserve to have a budget in place” that provides a stable environment to live and work.

Malloy acknowledged there are several areas in the two-year, $41.3 billion plan that he finds problematic, telling reporters later in the day that “it’s not a document I would have negotiated.”

Most notably, he and his budget director have warned lawmakers that language concerning the hospital tax puts about $1 billion in federal funding at risk. The federal revenue is tied to the tax as part of a complicated reimbursement formula. Malloy said that he line-item vetoed appropriations which support the new hospital tax proposal. He urged legislative leaders to fix the language so it’s in line with federal law.

While lawmakers could try and override the line item veto, Senate Republican Leader Len Fasano predicted the General Assembly likely would return soon to pass compromise language reached between Malloy’s administration and the Connecticut Hospital Association.

“I think we should fix it in the next couple weeks,” he said.

Democratic and Republican lawmakers overwhelmingly passed the tax and spending plan last week with enough support to override a veto. In a rare move, the agreement was crafted by legislative leaders from both political parties, without Malloy in the room.

Malloy said the possibility of a veto override did not play into his decision to ultimately sign the bipartisan deal. He acknowledged the document, which he contends could have been passed months ago, incorporates many of his policy priorities, such as required payments to the state’s pensions, a new formula for state grants to local schools that recognizes the impact of poverty, and an initiative to financially assist homeowners whose foundations have been crumbling due to the presence of a debilitating iron sulfide mineral.

Democratic Senate Majority Leader Bob Duff called it a “positive day for Connecticut,” finally ending an impasse, which required Malloy to run the state using his limited executive spending authority. That, in turn, prompted cuts to social service programs and schools, as well as angst and confusion among municipal officials who’ve wondered how much state aid to anticipate. Many municipalities also faced potential crediting rating downgrades because of the doubt over state grants.

“Starting today, communities and school districts across the state will have the resources they need to provide service and educate our students,” Duff said.

Gian-Carl Casa, president and CEO of the Connecticut Community Nonprofit Alliance, called it a relief that Malloy finally ended “four months of debilitating uncertainty” for the state’s nonprofit social service agencies.