Payments for the budget, known officially as the Multi-annual Financial Framework, are expected to be set at €908.4bn (£770bn). Payments for the previous seven-year spending round were £800bn.
The deal was announced by Herman van Rumpuy on Twitter at around 4 o’clock Friday afternoon. He tweeted: “Deal done! #euco has agreed on #MFF for the rest of the decade. Worth waiting for.”
The UK, Germany, Sweden and the Netherlands were pushing for a cut in the €1,033bn originally proposed in November, an increase of 4.3%. However, other countries including France and Italy sought to protect spending.
Prime Minister David Cameron had stated that an above-inflation increase in payments was unacceptable at a time when austerity measures were being implemented at home.
Speaking at a press conference following the deal, Cameron is reported by the BBC to have said: "I think the British public can be proud that we have cut the seven-year credit card limit for the EU for the first time ever"
Had a deal not been reached, the budget review would have rolled over to 2014 and subject to a 2% increase in line with inflation.
The revision still needs to be approved by the European Parliament, which has vowed to reject it.
