Jean-Claude Juncker, the Luxembourg premier, has been asked to stay on as head of the euro zone finance ministers group.
It was decided last night that Juncker will now step down by 'early next year'
"The mandate is for two and a half years but he will only serve for part of that," an EU source said.
Juncker, who has held the post since 2005, was due to step down in exactly one week, on July 17.
He has himself suggested remaining in the post for a further six months. His renomination was agreed by his peers during almost nine hours of talks last night that lasted well after midnight.
Finding a successor has been tricky, with the most likely new candidate, German Finance Minister Wolfgang Schaeuble, running into French opposition.
Juncker favoured handing over the post but agreed under French pressure to remain another six months on condition that the head of the Luxembourg central bank, Yves Mersch, should take a vacant board seat at the European Central Bank.
The Eurogroup agreed to nominate Mersch to the ECB board during the talks, with the formal adoption to be agreed later today when all 27 European Union finance ministers meet.
Mersch, 62, has been head of the Luxembourg central bank since 1998 and will replace Spain's Manuel Gonzalez Paramo, who stepped down from the ECB post in May.
Regling to head ESM bailout fund
Germany's Klaus Regling, head of the euro zone's temporary EFSF bailout fund, has been named to run its permanent successor, the European Stability Mechanism.
Regling will head the ESM as it prepares to take on a key role in solving the euro zone debt crisis, offering direct aid to member states.
Regling has headed the European Financial Stability Facility (EFSF) since it was set up in the spring of 2010 in the wake of the Greece debt crisis.
The €500 billion ESM was supposed to begin operations yesterday but has been delayed pending ratification by the required number of European states.
The "firewall" is destined to play the role of a "European monetary fund" that offers loans to countries facing financial difficulties on the basis of agreed conditions, or programmes, and which will be able to recapitalise ailing banks directly without adding to the country's national debt.
