Eurozone finance Chief Jean-Claude Juncker said the agreement includes:
1. A plan to reduce Greece's debt level to 124% of its GDP by 2020 and below 110% by 2022. The IMF had originally insisted on a debt-to GDP ratio of 120% by 2020.
2. A cut of 100 basis points on the interest rate charged to Greece by other Eurozone member states, excluding those countries also receiving bailouts.
3. A 15-year extension of the maturities of loans from other countries and the eurozone's bailout fund-the European Financial Stability Facility-and a deferral of interest payments by Greece on EFSF loans by 10 years.
Greece will receive up to 43.7 billion euros in stages as it fulfills the conditions. The December installment will comprise 23.8 billion for banks and 10.6 billion in budget assistance.
The IMF's share, less than a third of the total, will only be paid out once a buy-back of Greek debt has occurred in the coming weeks, but IMF Managing Director Christine Lagarde said the Fund had no intention of pulling out of the program.
They promised to hand back 11 billion euros in profits accruing to their national central banks from European Central Bank purchases of discounted Greek government bonds in the secondary market.
They also agreed to finance Greece to buy back its own bonds from private investors at what officials said was a target cost of around 35 cents in the euro.
European Central Bank President Mario Draghi said on leaving the talks: "I very much welcome the decisions taken by the ministers of finance. They will certainly reduce the uncertainty and strengthen confidence in Europe and in Greece."
Greek Prime Minister Antonis Samaras welcomed the deal. "Everything went well," he told reporters outside his mansion at about 3 a.m. in the morning. "Tomorrow, a new day starts for all Greeks."
However, the biggest opposition party, Syriza, dismissed the deal and said it fell short of what was needed to make the country's debt sustainable. The euro strengthened against the dollar after news of the deal and commodities and Asian shares also rose.
Greece, where the euro zone's debt crisis erupted in late 2009, is the currency area's most heavily indebted country, despite a big "haircut" this year on privately-held bonds. Its economy has shrunk by nearly 25 percent in five years.
Negotiations had been stalled over how Greece's debt, forecast to peak at 190-200 percent of GDP in the coming two years, could be cut to a more sustainable 120 percent by 2020.
The agreed figure fell slightly short of that goal, and the IMF was still insisting that eurozone ministers should make a firm commitment to further steps to reduce the debt stock if Athens implements its adjustment program faithfully.
The key question remains whether Greek debt can become sustainable without euro zone governments having to write off some of the loans they have made to Athens.
Germany and its northern European allies have hitherto rejected any idea of forgiving official loans to Athens, but EU officials believe that line may soften after next year's German general election.
Schaeuble told reporters earlier that debt forgiveness was legally impossible, not just for Germany but for other euro zone countries, if it was linked to a new guarantee of loans.
A source familiar with IMF thinking said a loan write-off once Greece has fulfilled its adjustment program would be the simplest way to make its debt viable, but other methods such as forgoing interest payments, or lending at below market rates and extending maturities could all help.
The German banking association (BDB) said a fresh "haircut" or forced reduction in the value of Greek sovereign debt, must only happen as a last resort.
No figures were announced for the debt buy-back in an effort to avoid triggering a rise in market prices in anticipation of a buyer. But before the meetings, officials had spoken of a 10 billion euro buy-back, that would achieve a net reduction of about 20 billion euros in the debt stock.
By Guylain Gustave Moke
Photo: Greece's flag-AFP