Mark Thompson pledges 'higher quality' BBC
The freezing of the licence fee for the next six years will result in fewer hours of BBC programmes made "but to higher quality", Mark Thompson says.
The corporation's director general told BBC One's Andrew Marr show the deal, announced in October, had been "a tough settlement but a good settlement".
The BBC will also take on costs including funding the World Service.
He also defended a Panorama expose of alleged FIFA bribery aired ahead of the 2018 World Cup announcement.
At the time of the announcement of the licence fee settlement - which means it will remain at £145.50 - the National Union of Journalists said the BBC should have fought government proposals.
Mr Thompson said the BBC had told the government that its plan to transfer funding of the World Service from the Foreign Office to the corporation "could only be done in the context of a complete settlement".
"I believe that, even though we only started working on that settlement about nine days before the conclusion, there was enough time for us to think it through," he added.
Asked if licence fee payers would notice a difference in the quality of output in the future, he replied: "I think people will notice a difference but I hope that the effect of the difference, in the end, will be positive."
He said he thought the BBC could "deliver services of what I hope will be higher quality than we deliver at the moment to the public within this framework".
"Sometimes it means doing fewer things, better, raising standards.
"Perhaps instead of doing three documentaries, you do two but you spend more money on them and you make sure they're higher quality."
The BBC could concentrate on "big exciting projects" like the organisation's opera season and its A History of the World in 100 Objects programming.
On the Panorama show - which has been been accused of damaging England's chances of hosting the World Cup - he said: "I believe we were right to broadcast and I believe we have very strong support from the British public in broadcasting."
The programme, broadcast three days before the vote to choose the host of the 2018 World Cup, made allegations about four of the 22 members of Fifa's governing body.
He said the Panorama team had received information a few weeks before the show was broadcast which they had thoroughly checked, "putting a number of specific allegations to the people involved, as we must do, and when the programme was ready to transmit, we transmitted it".
He said he understood there were "often reasons to believe that transmitting a programme might be impolitic or inconvenient".
But he added: "If you believe that you have a matter of real public concern to broadcast, there have got to be overwhelmingly powerful reasons for not broadcasting."