US President Joe Biden said yesterday that a deal to raise the American debt ceiling and avert a default is ready to move to Congress.
He added that the agreement was a "compromise", while Republican House Speaker Kevin McCarthy earlier called it "worthy of the American people".
They must now convince members of Congress to approve it.
The deal - which brings relief to global markets - is the result of long and bitter negotiations between Democrats and Republicans.
The Treasury had warned the US will run out of money on June 5 without a deal.
The BBC explains that the country must borrow money to fund the government because it spends more than it raises in taxes.
£25trillion debt limit
Republicans have been seeking spending cuts in areas such as education and other social programmes in exchange for raising the £25trillion debt limit.
Late on Saturday, news came of a tentative deal, but it took until yesterday for negotiations to continue and the agreement to be finalised.
Mr Biden did not give full details, but said he had not made too many concessions.
He urged lawmakers to pass the deal.
A US default would have upended the American economy and disrupted global markets.
In the US, the immediate effect would be that the government would quickly run out of funds to pay for welfare benefits and other support programmes, for instance.
Recession fear
The crisis would tip the American economy into recession - and this would result in unemployment in the country soaring.
A US recession would have big knock-on effects for many countries around the world, for which America is a key trading partner - they would not be able to sell to an economy that does not buy as much.
And because the dollar is the reserve currency of the world, a default would have sent panic across the planet.