The European Union has offered Turkey a possible €3bn in aid and the prospect of easier travel visas and "re-energised" talks on joining the bloc in return for its help in stemming the flow of migrants to Europe.
EU leaders at a summit in Brussels said they agreed on an "action plan" with Turkish President Tayyip Erdogan to cooperate on improving the lives of two million Syrian refugees in Turkey and encouraging them to stay put.
They also agreed to coordinate border controls to slow the influx of migrants crossing Turkey from Asia.
Though the plan put no figure on the "substantial and concrete new funds" that the EU would offer, German Chancellor Angela Merkel said the figure of €3bn, which EU officials said Turkey had requested, had been discussed and seemed reasonable.
"Our intensified meetings with Turkish leaders ... in the last couple of weeks were devoted to one goal: stemming the migratory flows that go via Turkey to the EU. The action plan is a major step in this direction," said summit chairman Donald Tusk, expressing "cautious optimism".
In formal conclusions agreed by the 28 national leaders at a meeting that ended after midnight, Turkey was offered an accelerated path to giving its citizens visa-free travel to the EU, provided it met previously agreed conditions.
Progress would also depend on Turkey showing real help in slowing migration and would be reviewed next spring.
Ms Merkel, who will visit Istanbul for talks with Mr Erdogan on Sunday in a political gesture two weeks before a Turkish general election, said it was clear that Europe's efforts to filter and process refugees would not work without Turkey's cooperation.
French President Francois Hollande stressed that Turkish citizens would not be granted visas on easier terms.
One condition still to be met is for Turkey to first stop granting easy entry to Pakistanis, Afghans and others who ultimately travel to Europe.
It must also first sign and implement a previously agreed deal to take back from Europe migrants who fail to win refugee status. "There must be no misunderstandings," Mr Hollande said.
European governments are wary of granting full visa-free access to 78 million Turks. Any liberalisation is likely to be limited at first to business travellers and students.
Leaders also agreed to "re-energise" negotiations on Turkey's application for membership of the European bloc, though they left open exactly how to do that.
Turkish President Erdogan today mocked the EU's contribution to easing the Syrian refugee crisis, saying the bloc had been awarded the Nobel Peace Prize for accepting just a tiny number of asylum seekers.
"They announce they'll take in 30,000 to 40,000 refugees and then they are nominated for the Nobel for that. We are hosting two and a half million refugees but nobody cares," Mr Erdogan said.
Speaking after Turkey and the EU agreed a plan for improving the handling of the refugee crisis, Mr Erdogan also questioned whether Brussels treated Ankara's long-standing membership application seriously.
He said: "They keep saying 'we can't do without Turkey'. It's very clear but they are not being clear. Then why don't you let Turkey in the EU?"
"Many EU countries are far behind us ... we are more advanced in terms of economy and [meeting] the membership criteria. But unfortunately, they are not being sincere."
Meanwhile, Hungary said it would close its southern border with Croatia from midnight as it presses ahead with a unilateral crackdown on the flow of migrants to Europe.
The move comes a month after Hungary's government shut its frontier with Serbia to migrants.
