Eurozone finance ministers have negotiated a rescue package for the rapidly deteriorating Greek economy following ten hours of intense talks in Brussels.
In response Greek Prime Minister Antonis Samaras said "a new day begins for all Greeks", the BBC reported.
As part of the deal with the International Monetary Fund (IMF), Greece's debts will be slashed by €40bn (£32bn) and the path to the next tranche of bailout loans worth another €44bn has also been set.
Another €9.3 billion will be paid in three "tranches" in the first three months of next year. Greece has already received €150bn in rescue loans, will a total of €240bn to be pledged overall.
Asian stock markets gained on news of the deal. Japan's Nikkei 225 climbed 0.37% to 9,423, while the MSCI Asia Pacific Index also gained 0.7% to reach a two week high. However, Hong Kong's Hang Seng remained almost flat at 21,855.
Europe's single currency also rallied, reaching its highest level agains the dollar this month, up 0.3% to $1.3010.
Investors have recently grown increasingly concerned about the perilous state of Greek banks and further riots and protests against austerity cuts in the capital have continued. Greek finance ministers have been anxiously awaiting the deal since June, and its government is now set to receive the aid on 13 December.
The deal will help the government pay wages and pensions in December. European Central Bank (ECB) president Mario Draghi said the bailout would "strengthen confidence in Europe and in Greece".
Today's bailout package is part of long term plans to help the troubled economy slash its crippling debt levels from 144% to 124% of its GDP by 2020. Measures include cutting interest rates on loans to Greece and returning €11bn in profits from ECB purchases of Greek bonds to its government.
Eurozone ministers also plan to help Greece buy its own bonds back from private investors at a reduced rate. German bonds declined on the news, as yields rose by five basis points early on Tuesday morning, from 1.41% to 1.46% on ten-year bonds.
Meanwhile the price of oil also strengthened on news of the bailout package, rising from its lowest level in almost a week, easing fears that Europe's debt crisis would derail the global economic recovery and dampen demand for fuel. Oil futures advanced by 0.5% on Wall Street overnight after falling 0.6% yesterday.
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