"History has been made! We are pleased to announce the agreement with our eurobond holders" President Hakainde Hichilema said on X, formerly Twitter.
"This is to restructure more than $3.5bn debt under the G20 Common Framework" the leader said.
The southern African nation's finance minister Situmbeko Musokotwane said on X that it was "major milestone all have been looking forward to. Eurobond restructuring has been delivered."
Zambia, Africa's biggest copper producer, with a population of nearly 20 million people, defaulted on its $18.6 billion external debt in 2020 but negotiations had stumbled over differences between China and Western creditors.
Hichilema said in December about 98 percent of official creditors have now signed a memorandum of understanding to restructure Zambia's debt which was estimated at $32.8 billion at the end of 2022.
Last year Lusaka had reached an agreement in principle with its creditors on $6.3 billion of its debt under a signed memorandum of understanding with its Official Creditor Committee (OCC).
Some official creditors including China initially rejected it, complaining about the more favorable conditions granted to some private lenders.
Until now, talks with private creditors had become deadlocked.
Hichilema said in December that the dispute was over a "comparability of treatment" rule under a debt restructuring framework for the poorest countries agreed by the G20 group in 2020.
This requires all creditors to take similar losses in any debt restructuring deal.
Zambia is seen as a test case for the G20 common framework at a time where there are rising concerns over debt in low-income nations.
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