A bipartisan House-Senate conference committee will be initiated and tasked with submitting formal budget recommendations by Dec. 13, should it reach an agreement.
Individuals seeking subsidies to buy insurance under Obamacare will be required to prove that their income level makes them eligible for such financial assistance under the law.
Workers furloughed during the government shutdown will receive back pay.
"The compromise we reached will provide our economy with the stability it desperately needs," Reid said on the floor. "It's never easy for two sides to reach consensus, it's really hard, sometimes harder than others. This time was really hard."
The proposal will not include previously considered proposals to repeal or delay Obamacare's medical device tax or postpone a reinsurance fee under the law (a delay that labor unions had pushed for) aimed at stabilizing health insurance premiums.
"The relief we hope for is to reopen the government, avoid default and protect the historic cuts we achieved under the Budget Control Act," McConnell said on the Senate floor. "This is far less than many of us had hoped for, frankly, but it's far better than what some had sought."
UPDATE 5:50 pm: The final legislative text has been released and sent to reporters by a Senate Democratic leadership aide. (A second aide cautioned that some "superficial" tweaks may still be made.) Read it below.
The Senate is set to vote Wednesday evening, with the House to follow shortly after.