A new Programme for Government has been agreed between Fianna Fáil and the Green Party.
It was expected that the talks would be concluded by lunchtime but its understood there was particular difficulty over the issues of education and political reform.
In the final hour of negotiations 'significant progress' was made on the key issues of education, and political reform.
The Taoiseach commented that 'the agreement reached reflected a fair and appropriate response to meet the economic realities facing the State.'
Brian Cowen continued 'the programme sets out the Government partner's plans for Ireland's development for the remainder of the Governments term in office up to 2012 and is designed to act as a blueprint to meet the challenges we now face.'
Green Party leader John Gormley stated 'The Programme will re-direct the work of government to better tackle economic recession and address the serious environmental challenges ahead. '
He continued, 'it will help protect and create jobs while also aiming to restore public confidence in politics. It will also help government do more with less resources while also protecting the most vulnerable in our society.'
The Green party leader said 'we hope to present full details of the revised programme to our Green Party members and to the Irish people tomorrow morning.'
The agreement has to be endorsed by a two thirds majority at tomorrow's Green Party convention in Dublin.
The Fianna Fáil and Green Party negotiating teams began an eighth and final day of talks today, aware that a deadline was looming.
Last night Taoiseach Brian Cowen was optimistic that the talks could be concluded successfully.
He said he did not 'presume on the outcome', as it was an internal party matter for the Green Party, but said he was 'hopeful'.
Green TD Paul Gogarty told a teacher's trade union that he will not be supporting any Programme for Government if education at all levels is not protected.
In a letter to the Teachers' Union of Ireland, Mr Gogarty said the Greens were fighting on a range of issues at both primary and second level, further and adult education.
He said they were pushing for reversals of cutbacks in some areas and no further cuts in others.
Mr Gogarty said dealing with Fianna Fáil's tactics of give one day and take back the next was proving highly frustrating.
One result of the negotiations has already been announced.
The NAMA legislation currently before the Dáil is to be amended to allow for a levy to be charged on the banks if the National Asset Management Agency makes a loss.
It had been expected that the levy would be provided for in separate legislation.
The Department of Finance says provision for a levy will be made at committee stage, but it would only be needed if NAMA has made a loss when it is wound up, or after ten years.
