The net contribution from banks and other investors is estimated at 37 billion euros with an additional 12.6 billion euros from a debt buy-back programme. Eurozone leaders offered Greece some respite from its crippling debt while warning it could still face a dramatic default as they battled on Thursday to prevent the crisis from spreading.
The eurozone will provide Greece fresh loans, take steps to reduce the country's 350-billion-euro debt and open the door for the private sector to contribute to a second bailout, according to a draft agreement.
"We agree to support a new programme for Greece," said the draft accord seen by AFP. "Greece is in a uniquely grave situation in the Euro area. This is the reason why it requires an exceptional solution."
The programme will provide loans with lower interest rates and extended maturities "to decisively improve the debt sustainability and refinancing profile of Greece."
The 17-nation bloc will offer similar improved loan terms to two other bailed out nations, Portugal and Ireland.
Diplomats told AFP the eurozone and International Monetary Fund were considering providing rescue aid worth 71 billion euros ($101 billion), not including a possible contribution from the private finance sector. The draft text did not specify a sum.
News of the draft deal sent the euro and stocks markets shooting up. They had earlier sunk on a warning that Greece could face some form of default under the new rescue package.
"We cannot exclude any possibility and everything should be done to prevent (a default)," said Luxembourg Prime Minister Jean-Claude Juncker, head of the Eurogroup of finance ministers, on arrival for the Brussels summit.
Juncker insisted that the single currency was "not in danger" following weeks of market turbulence driven by fears the crisis was dragging down Italy and Spain and could spread across the world.
A breakthrough became possible after the eurozone's two powerbrokers, German Chancellor Angela Merkel and French President Nicolas Sarkozy, reached a compromise just hours before the summit.
After unsettling markets earlier this week by downplaying hopes of a "spectacular" deal, Merkel was upbeat that an accord would be reached to "attack the root of the problems" of Greece's weakness.
Leaders dropped the idea of a bank tax to help fund a second Greek bailout but kept German demands for private sector involvement, even at the risk of triggering a default, diplomats said.
Germany, backed by the Netherlands and Finland, had been at odds with the European Central Bank and Paris over Merkel's demands for private investors to shoulder some of the bill for the new Greek rescue, one year after a first 110-billion-euro ($156-billion) bailout.
There are concerns that any change to the terms of outstanding Greek sovereign bonds could prompt rating agencies to declare Athens in default, with potentially dramatic domino consequences.
The draft said private bondholders would be given three choices - a partial buyback of Greek debt, exchanging Greek bonds for new ones with longer maturities, or a "rollover" in which creditors reinvest in new Greek bonds as soon as current ones are redeemed.
The European Union and IMF's bailout to Greece last year has proved insufficient and since then, Ireland and Portugal have received their own multi-billion-euro rescues.
To ease the burden on Greece, Portugal and Ireland, loans to the three countries may be extended from 7.5 years to 15 years while the rates they pay would be lowered from 4.5 percent to 3.5 percent, the draft said.
Financial markets reacted with relief, with Europe's main stock markets all jumping more than one percent and the euro topping $1.44 on Thursday.
"The markets feel quite secure that significant progress will be made today that will probably change the shape of the Eurozone as we know it," said Kathleen Brooks of research group Forex.com.
"History is in the making. We suspect there will be steps to closer economic and fiscal integration after today's summit."