Governments across Europe are set to buy Spanish and Italian bonds through two European rescue funds, a move the ECB hopes will send a signal to financial markets that Germany is behind the eurozone.
Under the proposed deal, the €500bn European Stability Mechanism (ESM) and the European Financial Stability Facility (EFSF), which now stands at €250bn following the bailouts of Ireland and Portugal, will be able to buy bonds issued by beleaguered European countries, the Telegraph reports.
The ECB previously bought about €210bn of bonds in this way but stopped last year.
At this week's G20 summit, Angela Merkel and other European leaders have come under intense scrutiny to take radical action to contain the growing euro crisis which has pushed up the cost of Spanish bonds to unsustainable levels.
French President Francois Holland said: "It will be more on mechanisms that allow us to fight speculation."
Hollande said rates paid by Spain and Italy to borrow on debt markets were "unacceptable", as yields on the counties' sovereign debt hovered around the unsustainable 7% mark.
"We must show a much faster capacity for action," he added.
Experts said it was a step towards establishing shared eurobonds, where debt from across the single currency area is shared and effectively underwritten by Germany.
The Chancellor, George Osborne, indicated he is optimistic a deal could be agreed, according to the Telegraph.
"We will see what the eurozone announces over the next couple of weeks, but there is no doubt that they realise that individual measures in individual countries - like recapitalising Spanish banks and getting a Greek government that is in favour of staying in the euro and doing what is necessary to stay in the euro - are not by themselves enough," he said
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