Greece's government borrowing costs are near their lowest level since 2010 today as the country seeks to end a three-year exile from financial markets.

Some five years since European Central Bank Mario Draghi's pledge to do "whatever it takes" to preserve the euro, the debt sale by the bloc's weakest economy is the clearest sign yet of the euro zone's recovery from a crippling debt crisis.

Greece will sell a new five-year bond and conclude an offer to switch or tender old bonds maturing in 2019.

Thomson Reuters' IFR reported it is aiming to sell the new debt at around 4.875%.

The yield – which moves inversely to prices – on the outstanding debt fell sharply to its lowest since issue in 2014 when the deal was announced yesterday.

Investors snapped up the bonds in anticipation of being offered lucrative terms to switch into the new bond.

That bond also serves as the current measure of Greece's short-term borrowing costs, which hit their lowest in over seven years, according to Reuters data.

 "The timing is favourable from a macroeconomic and market perspective," said Barclays' chief European economist Antonio Garcia Pascual.

Mr Pascual said the timing of the deal was favourable for a number of reasons.

These include the government's primary surplus and official funding support, improving economic conditions, limited political risks and debt relief that will likely be delivered later this year or next.

Athens's return comes after a bailout review last month, where lenders sketched out measures to chip away at its debt mountain – which stands at 180% of economic output - to be carried out when its current bailout ends in 2018.

Greece's two-year bond yield is little changed at 3.29%, above the low of 3.21% struck yesterday.

Its return has also spurred demand for other low-rated debt in the euro zone, with bonds of Portugal, Italy and Spain outperforming those in the bloc's powerhouse Germany.

The gap between Italian and German 10-year bond yields is the lowest since December 2016 at 153 basis points.

Irish 10-year bond yields have fallen slightly to 0.814%.

Greece's government has said the bond sale should be viewed as a test run and considered part of an overall strategy to ensure the country can fully return to markets next year.

"This step can only be considered a symbolic one because the highly indebted country, which is still dependent on financial assistance, would not be able to refinance itself in full via the capital market," DZ Bank analysts said in a note.

Greece's return to markets in 2014 with two bond sales proved short-lived as a newly-elected leftist government quarrelled with creditors over debt relief and yields surged.