The ceasefire agreement has been broadly welcomed and has resulted in a much-needed economic boost for Ukraine from the IMF.

A ceasefire in eastern Ukraine has been agreed after all-night talks in Belarus involving the leaders of Russia, Ukraine, France and Germany.

It will come into effect on Sunday,15 February, and will be followed by the withdrawal of heavy weapons, Russian President Vladimir Putin said.

“We have managed to agree on the main things,” he told reporters after the talks, which began on Wednesday evening and lasted 16 hours.

Germany's Chancellor Merkel embraces France's President Hollande during a meeting with the media after peace talks on resolving the Ukrainian crisis in Minsk

Angela Merkel and Francois Hollande embrace after the deal was reached

Ukrainian President Petro Poroshenko said: “The main thing which has been achieved is that from Saturday into Sunday there should be declared without any conditions at all, a general ceasefire.”

The truce was signed by the so-called “contact group” comprising pro-Russian separatist leaders, Russian and Ukrainian envoys and European mediators.

A previous truce signed last September collapsed soon after.

The key points of the latest agreement are:

:: A general ceasefire to start on Sunday

:: Heavy weapons to be pulled back from a division line determined by both sides

:: Ukraine to take control of the border with Russia

:: The provision of special status for the rebel regions

:: Measures for addressing the humanitarian crisis affecting thousands of civilians caught up in the fighting

Mr Putin said there was still disagreement over Debaltseve, a key transport hub and the centre of fierce fighting.

He understood rebels had surrounded up to 8,000 Ukrainian troops and expected them to lay down arms ahead of the ceasefire, but Mr Poroshenko disputed this.

The ceasefire deal was welcomed by French President Francois Hollande and German Chancellor Angela Merkel, who led the discussions.

Mr Hollande said Mrs Merkel, Mr Poroshenko and himself would ask the European Union to back the agreement at a summit later on Thursday.

Mrs Merkel said it offered a “glimmer of hope” that the conflict, which has claimed over 5,300 lives since April, would come to an end.

However, she added that “concrete steps must of course be taken and there will still be big hurdles ahead”.

Her concerns were echoed by Mr Hollande who said the next few hours will be “decisive” as he arrived for the EU summit in Brussels.

Ukraine received an extra boost when the International Monetary Fund confirmed a $17.5bn aid package for the country, conditional on sweeping economic reforms.

Russia also benefited from the ceasefire agreement. Its main stock market rose 6% on the news amid hopes it would lead to an easing of western sanctions.

Before the deal was announced reports suggested little progress had been made at the summit, in the Belarusian capital Minsk.

Sky’s Stuart Ramsay, in Minsk, said: “This has been quite a remarkable night where it looked like they weren’t even going to come at one point.

“Then we had this huge marathon meeting where everyone was convinced it would come up with a plan, then everyone thought there was a plan and then suddenly there wasn’t a plan.

“Our understanding from the Ukrainians is that the rebels aren’t happy with the agreement and, of course, the Ukrainian government itself said they weren’t happy with the agreement.”

Fighting in eastern Ukraine intensified ahead of the talks and continued as they were taking place, with 10 civilians and two Ukrainian soldiers killed in the last 24 hours, officials said.

Kiev claims around 50 tanks and dozens of other heavy weapons entered Ukraine from Russia while the summit was being held.