An agreement struck at international talks over Iran's nuclear programme is "a good basis for what I believe could be a very good deal", Foreign Secretary Philip Hammond said.
EU foreign affairs chief Federica Mogherini announced that the over-running talks had finally "reached solutions on key parameters of a joint comprehensive plan of action" to be thrashed out by June 30.
Tehran - which denies seeking to develop nuclear weapons - hopes to see sanctions eased by agreeing to restrictions on its programme.
Mr Hammond is in Lausanne, Switzerland, for the talks between Iran and the so-called E3+3 of the US, UK, France, China, Russia and Germany, which were due to finish on Monday.
As the outline of the deal was set out at a press conference, he said it was "well beyond what many of us thought possible even 18 months ago" but cautioned much work remained to be done.
"We have agreed the key parameters of a comprehensive deal on Iran's nuclear programme," he said - after what had been "extremely tough" talks.
Iran had agreed to limit enrichment capacity, level and stockpile for specified durations, conduct research and development "within agreed bounds" and to allow greater oversight of its activities, he said.
In return it would secure "significant economic and financial sanctions relief including the termination of all UN Security Council resolutions" once the final deal was agreed.
Such a deal would "provide reassurance that the programme is peaceful", he suggested.
"This is well beyond what many of us thought possible even 18 months ago and a good basis for what I believe could be a very good deal.
"But there is still more work to do. The fine detail of any deal will be very important, in particular specifics of oversight measures and mechanisms for handling UN Security Council resolutions.
"Diplomats and technical experts from all sides will work intensively over the coming weeks to finalise the detail by the end of June. Sanctions will remain in place until the comprehensive deal is agreed and implemented."
He hailed the deal as "testament to the persistence and willingness of all sides to be flexible in finding solutions to seemingly intractable problems".
"It demonstrates what can be achieved when international partners work together in pursuit of a common goal.
"We will continue to have our differences on many other issues with Iran, including on some key regional issues.
"But a comprehensive deal will improve confidence, trust and dialogue on all sides, and most importantly, avoid a nuclear arms race in the region."