Cyprus has agreed a bailout package with the European Union and International Monetary Fund and expects the lenders to confirm the deal later today, the island's government spokesman said.
If confirmed by the lenders, Cyprus will become the fourth eurozone country to request a sovereign rescue.
The Mediterranean island sought financial aid, which could be up to €17.5bn, equal to its entire annual economic output, in June, after its banks were battered by their exposure to the Greek crisis.
The spokesman did not put a price tag on the bailout sum, saying this will depend on a report early next month that will establish how much money the island nation will need to recapitalise its banks.
"The deadline that was set by the European Central Bank for the recapitalisation of the banks expired, so we had to enter the (EU/IMF) rescue mechanism," spokesman Stefanos Stefanou told reporters.
The government has already briefed trade unions on the terms of the deal and will brief political leaders soon after, Mr Stefanou said.
"The bailout deal includes unpleasant measures," he said without elaborating.
However the island's public sector workers already voiced their opposition to the deal.
"These measures are unjust, they will be a massacre," said Glafkos Hatzipetrou, a senior official with public sector union PASIDY, after getting briefed on the deal.
Cyprus and the Troika of EU, IMF and ECB lenders have been at odds over a host of issues, including privatisations and pension cuts, as well as the amount needed to recapitalise the banks.
A source from the Troika told Reuters in Nicosia that an analysis of the country's debt and its financing needs still needed to be addressed.
An analysis on the state of Cypriot banks is expected by 3 December, when eurozone finance ministers meet again in Brussels and aim to decide on a programme for the government in Nicosia.