The International Monetary Fund will provide a loan of between $14 billion and $18 billion to help the troubled Ukrainian economy.
"Following the intense economic and political turbulence of recent months, Ukraine has achieved some stability, but faces difficult challenges," the IMF said in a statement.
"The goal of the authorities' economic reform program is to restore macroeconomic stability and put the country on the path of sound governance and sustainable economic growth while protecting the vulnerable in the society," the statement added.
The agreement would be subject to approval by the IMF's board, which is expected to be received in April.
The loans are tied to economic reforms in the country.
The new government in Ukraine which had been struggling to keep the economy afloat, finds its task doubly difficult after Russia's takeover of the Crimean peninsula.
Prime minister Arseny Yatsenyuk told the parliament today that the country was "on the brink of the economic and financial bankruptcy" and that its economy could plunge 10 per cent this year unless urgent steps were taken.
The IMF agreement, after approval from the IMF's board, would unlock aid from other donors, as well, with Ukraine set to receive a total of $27 billion over the next two years, according to IMF official Nikolay Gueorguiev who spoke at a news conference in the Ukrainian capital of Kiev, The Wall Street Journal reported.
Outlining certain "prior actions" before the IMF board approved the loan, Gueorguiev said, these included institutionalising the flexible exchange rate regime and reform of the energy sector.
The exact amount of the IMF loan would depend on the level of support given by other lenders, including the US and EU, according to the IMF.
According to Ukrainian central bank chief Stepan Kubiv the reforms might be "painful."
He added that the Ukrainian economy was "in a very complicated situation," which required that the government shift "from populism to more pragmatic work."