The decision was taken on Friday on the second day of a summit of EU leaders in Brussels.
The Council confirmed that political agreement had been reached by Brexit negotiators on parts of the legal text of the withdrawal agreement, including a transition period that will last until December 2020.
The summit was partly overshadowed by the UK’s growing diplomatic row with Russia with the EU agreeing to withdraw its ambassador from Moscow.
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This comes as EU leaders threw their weight behind Britain’s outrage at the alleged poisoning in Salisbury of a former Russian double agent and his daughter.
Speaking about the agreement on Brexit on Friday, UK Prime Minister Theresa May told reporters, “I welcome the fact that the EU Council this morning has agreed the details of the implementation period, that period after we leave the EU next March 2019 until the end of December 2020.
“This gives certainty to people and businesses, it gives them the clarity to plan for their future and it ensures that they will only have to make one adjustment, one change when we enter into the new relationship with the European Union in the future. The Council has also endorsed its guidelines for our negotiations for that future relationship. I believe there is a new dynamic now in the negotiations.”
She added, “I believe we are approaching this with a spirit of cooperation, a spirit of opportunity for the future as well. And we will now be sitting down and determining those workable solutions for Northern Ireland but also for our future security partnership and economic partnership and I believe this is in the best interests for the UK and the EU, that we get a deal that is in the interests of both.
“It is important we have made significant progress in the Brexit negotiations. We’ve made good progress on the withdrawal agreement but also I am looking for a new dynamic in the next stage of the negotiations so that we can ensure that we do develop, that we work together to negotiate and develop that strong future economic and security partnership which I believe is in the interest of the UK and the European Union.”
However, Irish Taoiseach Leo Varadkar warned that agreement was still needed on the Irish border issue.
He said, “What is particularly welcome now is that we have agreed the terms of the Brexit transition which means that really nothing will change until 2021.”
He added, “It had been suggested in the past by the British side and others that they would seek some changes to rules and regulations during that period. It is now going to be the case that for the best part of two years after the UK leaves the EU they will still be bound by rules and regulations and European laws that they no longer have an input into.”
Dutch Prime Minister Mark Rutte said he still hopes the UK will hold a second referendum on EU membership, saying, “If some way or another the UK would decide to change its position it will be highly welcome I think by every one of the liberal prime ministers and my impression is of almost everybody in the European Union.”
Further reaction to the deal agreed on Friday came from Polish Prime Minister Mateusz Morawiecki who said that Poland is satisfied with the outcome of negotiations so far, adding, “We’ve met our goals.”