The bloc began its summit in Brussels on Friday morning, and after several dialogues that lasted for hours which held the record of the organization's longest as the meeting it's had in the French city of Nice for five days.
The deal, according to BBC will see the 27-nations bloc holding out a sum of €750bn (£677bn; $859bn) in grants and loans to ease the effect of the pandemic on the economy.
It is said to be a €390bn programme of grants to member states hardest hit by the pandemic and it was reached alongside agreement on the bloc's next seven-year budget, worth above €1tn.
A "pivotal moment" for Europe, the Summit chairman Charles Michel said.
There was a discord during the talks between the hardest hit nations of the outbreak and "frugal" members who were more concern about the costs. The frugal four were Sweden, Denmark, Austria, Netherlands and Finland who had opposed allowing €500bn to be offered as grants and didn't want to go beyond the limit of €375bn while others such as Spain and Italy, did not want to go below €400bn.
The European Commission will be in charge of distributing the funds, and the 27 member states will be able to turn down a spending plan if opposed by a weighted majority, according to AFP news agency.
President Ursula von der Leyen tweeted, "Today we've taken a historic step, we all can be proud of. But other important steps remain. First and most important: to gain the support of the European Parliament. Nobody should take our European Union for granted. It is our common responsibility to deliver."