London (CNN)The UK has reached a joint legal agreement with the European Union on the legal terms of a Brexit transition deal, a milestone development in the tortured negotiations to extricate Britain from the bloc.
UK and EU strike Brexit transition deal
Under the terms, the UK will be able to negotiate trade deals with other countries during the 21-month transition, which begins when Britain officially leaves the EU at the end of March 2019.
But in order to secure the deal -- which gives a degree of certainty for businesses -- the UK was forced to make concessions, including on the rights of EU citizens who arrive during the transition period. London also had to accept a "backstop" deal to avoid a "hard" Irish border that would keep Northern Ireland subject to EU law.
Speaking at a news conference in Brussels on Monday, the EU's chief negotiator Michel Barnier said agreement on the draft legal text for withdrawal was a "decisive step" towards Brexit.
He said the text, to be presented to EU heads of government on Friday, will be "the international agreement for an ordered withdrawal of the UK from the EU."
The announcement came after "intense" negotiations between technical and legal experts from both sides over the past few days, Barnier said.
Speaking alongside the UK's Brexit Secretary David Davis, Barnier said: "What we are presenting today is a joint legal text, which to my mind constitutes a decisive step."
The provisional accord, which is not yet set in stone, includes the terms for a 21-month transition period after Brexit, which is scheduled to happen on March 29, 2019, to allow business to adjust.
In what could be seen as a big win for the UK, the draft agreement confirms that the UK may sign trade deals with other nations, as long as they don't come into force until the end of the transition period.
Sterling jumped against the euro on the news as the markets cheered the announcement.