More work will be needed before the bailout can be finalized, and some EU parliaments will have to ratify the deal, but analysts say the pressure to reach an agreement was high.
"Neither the Cypriot government, nor the eurogroup of EU finance ministers wants to see a eurozone member default, threatening catastrophic contagion for other financially troubled member states," IHS Global Insight country analyst Charles Movit wrote in a note last week.
Market confidence in the eurozone was briefly shaken again recently when Italian elections left the country with a hung parliament. Lack of a stable government would set back efforts to bring down Italy's debt mountain, the second largest in the eurozone after Greece.
-- CNN's Isa Soares contributed to this report from London