The agreement came at the end of marathon talks to finalize the details of a comprehensive policy response to the government debt and banking problems threatening the stability of the euro currency and global economy.

The response aims to resolve three related problems: the debt crisis in Greece, instability in the banking sector and a sorely outgunned bailout fund.

Under the new plan, Greek bondholders voluntarily agreed to write down the value of Greek bonds by 50 percent, which translates into €100 billion and will reduce the nation's debt load to 120 percent of economic output from 150 percent.

The agreement also calls for the creation of a new financing program with the International Monetary Fund worth up to €100 billion, according to an official statement.

The EU heads of state also agreed to raise capital requirements for banks vulnerable to losses on euro-area government bonds.