The EU’s Brexit negotiator Michel Barnier said the two sides had agreed on a transition period, calling the announcement a “decisive step”.
He spoke after meeting with the UK’s Brexit secretary David Davis.
The transitional period will begin from Brexit day 29 March 2019 and is designed to smooth the path to the future permanent relationship.
Mr Barnier said there was agreement on the rights of EU citizens in the UK and UK citizens in the EU after Brexit.
Both the UK and the EU hope the terms of an agreement on the transitional period can be signed off at the EU summit this week.
Among other issues the two sides have had to negotiate for the transition period have been what rights expat citizens have, what role the European Court of Justice has in the UK, fishing quotas, whether the UK can negotiate future trade deals with non-EU countries as well as the continuing issues of the Northern Ireland and Gibraltar post-Brexit.
BBC Europe Editor Katya Adler said the issues of the Northern Ireland border and Gibraltar have the potential “to bring the whole Brexit deal down”.
Adrian O’Neill, Ireland’s ambassador to the UK, says it is crucial both sides make progress on the border issue, while Gibraltar’s chief minister Fabian Picardo has expressed confidence that it will be included in the planned Brexit transition deal.
The UK and EU hope that if and when a transition deal is agreed negotiations can focus on what sort of permanent future relationship the UK and EU will have with the aim of a deal being agreed in the autumn to allow time for EU member states and the UK Parliament to ratify it before Brexit next March.>