British students will be able to study abroad at European universities under a flagship EU scheme for the first time since Brexit.
Ministers will announce on Wednesday that the UK is rejoining the Erasmus student exchange programme from 2027.
The move will mean that British students will be able to spend a year studying at European universities as part of their UK degree courses while not paying any additional fees, and vice versa.
The announcement is the first tangible outcome of Sir Keir Starmer’s reset with the EU and follows talks last week between Nick Thomas-Symonds, the Europe minister, and his EU counterpart Maros Sefcovic.
Both sides needed to agree on a deal before the new year in order for UK students to participate in Erasmus from 2027.
Under the plans, to be set out to MPs on Wednesday, British universities will be able to be associated with the Erasmus scheme to allow their students to spend up to a year out of their course at a European university while EU students will be able to come to the UK.
Students would continue to pay tuition fees to their home university but would not face any additional charges and would be eligible for a grant to help with the additional costs of living abroad.
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The scheme would also be open to further education colleges, sports exchanges and some forms of work placements.
In negotiations the UK government has argued for a discount on membership fees which is calculated on the basis of GDP.
Before Brexit, the UK was a net contributor to Erasmus, with more European students coming to Britain than UK students studying abroad and it was estimated to cost the taxpayer more than £200 million a year.
The EU is understood to have offered the government a 30 per cent reduction of fees in the first year of membership.
A senior government source said rejoining Erasmus would be “good news” for students and universities and underlined the benefits of the government’s wider reset.
The move has also been welcomed by Brussels. Sources said the European Commission was delighted to get the deal over the line.
Vivienne Stern, chief executive of Universities UK, described it as “fantastic news for the UK, and for students and universities here and across Europe”.
She said: “The agreement marks a huge step forward in our relationship with the EU and will offer life-changing opportunities for thousands of students. The UK government and the EU deserve credit for moving these complex negotiations forward at pace and reaching a mutually agreeable deal.
“We look forward to working with our universities and our partners in Europe, to ensure that the programme plays a pivotal role in rebuilding our international partnerships and delivers the best possible outcomes for the UK.”
A government spokesman declined to comment on the announcement.