President Donald Trump announced the deal on his Truth Social platform on Sunday, writing: "The Deal with the Islamic Republic of Iran is now complete."
He added: "Ships of the World, start your engines. Let the oil flow!"
Pakistani Prime Minister Shehbaz Sharif, who mediated the talks, said the agreement called for "the immediate and permanent termination of military operations on all fronts, including in Lebanon."
The deal is due to be formally signed on Friday in Switzerland.
The memorandum of understanding will last 60 days, during which negotiations on the details of Iran's nuclear programme will take place.
Under the terms being discussed, Iran would commit to permanently forgoing nuclear weapons – a concession a senior White House official described as significant.
In return, Tehran would receive gradual sanctions relief and reintegration into the global economy.
The official said Iran would receive no upfront payment, only economic benefits tied to fulfilling its commitments.
Iran's deputy foreign minister, Kazem Gharibabadi, confirmed the deal but said Tehran would not formally approve it until its own final demands were incorporated into the text.
The announcement was welcomed by leaders beyond the region.
Britain, Germany, France and Italy said in a joint statement they were prepared to lift sanctions on Iran in response to "clear, verifiable steps" to limit its nuclear programme.
EU foreign policy chief Kaja Kallas called the announcement a "potential breakthrough" and said the bloc stood ready to contribute to a sustainable resolution.
Republican Senator Lindsey Graham praised the deal but said he would be "watching closely" the coming negotiations on Iran's nuclear programme, noting that any formal agreement would require Congressional review and a vote.
The agreement was struck despite an Israeli strike on Lebanon on Sunday that drew criticism from both Iran and Trump.
Israeli Defence Minister Israel Katz said Israeli forces would remain in security zones in Lebanon, Syria and Gaza indefinitely.
(ał)
Source: PAP, Reuters