Stephen Austin agreed to implement his father's plan, and in the beginning of the summer of 1821 he and a small group of settlers crossed into Texas. Before he arrived in San Antonio to meet with the governor, they learned that Mexico had earned its independence from Spain, making Texas a Mexican province rather than a Spanish province. Governor Martinez assured him, however, that the new Mexican government would honor the colonization contract.
Stephen returned to Louisiana to recruit settlers. He offered land at 12.5 cents per acre, only 10% of what comparable acreage sold for in the United States. Settlers would pay no customs duties for seven years and would not be subject to taxation for ten years. In return, they would be expected to become Mexican citizens.
In March 1822, Austin learned that the new Mexican government had not ratified his father's land grant with Spain. He was forced to travel to Mexico City, 1,200 miles (1,931 km) away, to get permission for his colony.
The 1823 Imperial Colonization Law of Mexico allowed an empresario to receive a land grant within the Mexican province of Texas. The empresario and a commissioner appointed by the governor would be authorized the distribute land to settlers and issue them titles in the name of the Mexican government. Only one contract was ultimately approved under this legislation, the first contract granted to Stephen F. Austin.
Between 1824 and 1828, Austin granted 297 titles under this contract. Each head of household received a minimum of 177 acres or 4,428 acres depending on whether they intended to farm or raise livestock. The grant could be increased for large families or those wishing to establish a new industry, but the lands would be forfeited if they were not cultivated within two years.