Eurozone officials say a deal has been reached to extend the Greek bailout by four months, following a meeting of eurozone finance ministers in Brussels tonight.
However the existing austerity arrangements will still apply until a new set of terms and conditions are agreed.
Greece has agreed to present its own proposals for those terms and conditions at another meeting on Monday.
Eurogroup chairman Jeroen Dijsselbloem says it is a key moment:
The deal was reached after talks in Brussels which were delayed for four hours as ministers worked on a draft accord.
Greece has committed not to pursue any "unilateral" measures that might affect the country's budget targets.
As part of the deal Greece must provide a list of reforms based on its current bailout programme for assessment on Monday.
This will be reviewed on Tuesday by the European Central Bank (ECB), the International Monetary Fund (IMF) and the European Commission.
"The institutions will provide a first view whether this is sufficiently comprehensive to be a valid starting point for a successful conclusion of the (bailout) review," said a eurozone statement.
If the three bodies - dubbed the Troika by Greeks - do not believe the proposals go far enough, the list will be revised with a view to being agreed on by the end of April.
'First step'
Mr Dijsselbloem said the loan extension was a "first step in this process of rebuilding trust" between Greece and its euro partners and allows for a strategy to get the country "back on track."
"Trust leaves quicker than it comes," he said.
Greek Finance Minister Yanis Varoufakis said the deal would allow the country to rebuild ties with its EU partners. "The four-month period will be a time to rebuild new relations with Europe and the IMF," he told reporters.
He said Greece had not used any threats or bluff to get the agreement and added it was a small step to a new direction its people.
Athens' proposals, which included commitments to meet debt obligations and sustain a degree of budgetary discipline, initially got a mixed reception from the eurozone countries.
Some said they were a step in the right direction while others, led by Germany, a vociferous critic, said they did not go far enough.
Greece's current bailout deal ends after 28 February.
Finance Minister, Michael Noonan, says Greece now has to convince the Troika it can come up with a better version of its bailout deal:
Greek prime minister Alexis Tsipras told Reuters on Friday he was "certain" his government's request would be accepted despite Berlin's objections and called for a "historic political decision" to seal a deal.
He insisted his nation had done "everything possible".
His anti-austerity government was seeking a compromise as it ran the risk of running out of cash and defaulting on its debts without agreement by the end of the month.
Such a scenario could have forced the country to leave the single currency.
Greece has ruled out the prospect of any deal under the terms of its previous rescue, citing its mandate from the Greek people who swept the anti-austerity Syriza party to power last month.
The government blames the conditions attached to its €240bn bailout of hampering the country's recovery and leading to a deterioration of living standards. Unemployment remains at more than 25%.
On Monday, the government rejected a eurozone plan to extend its current bailout commitments, describing it as absurd.
Originally posted at 16.16
