Together with at least 10 billion euros expected from the International Monetary Fund in the first year, it could add up to the biggest multilateral financial rescue ever attempted.
"With today's decision, Europe sends a very clear message that no one, any longer, can play with our common currency, no one can play with our common fate," Greece's Prime Minister George Papandreou said in a statement.
In a rare weekend telephone conference, finance ministers of the 16 nations that share the single European currency backed a detailed plan for Greece to borrow from euro-zone governments and the IMF at significantly below market rates.
A Greek Finance Ministry official said it was logical to expect the package would amount to 80 billion euros over three years, dwarfing past IMF bailouts for Mexico and Argentina.
Such firepower, even if held in reserve, may reassure investors and make them more willing to continue buying Greek bonds. But big uncertainties remain over the longer-term prospects for reducing Greece's debt mountain, which have dented confidence in the euro.
The Greek official said the government would decide within a few days whether to ask for the aid, depending on whether market interest rates subside.
European Economic and Monetary Affairs Commissioner Olli Rehn said the 3-year euro zone loans would carry an interest rate of about 5 percent -- well below current market rates of about 7.3 percent. That responds to Greece's appeal to be able to borrow at rates closer to its peers in the currency area.
Assistance for subsequent years would be decided later."If the mechanism had to be activated, it would not be a violation of the no-bailout clause (in the European Union treaty) since the loans are repayable and contain no element of subsidy," Jean-Claude Juncker, chairman of the Eurogroup of finance ministers, told a Brussels news conference.
A German government official welcomed the agreement, which he said should enable Greece to do its fiscal "homework" on deficit reduction without market distraction.
"It should contribute to a calming of the markets so that Greece can take care of its homework in peace and quiet."
Rehn said all euro zone countries would pay proportionately to their share in the ECB's capital, making Germany by far the biggest lender, followed by France and Italy.Talks on coordination with the IMF will begin on Monday, he said.
The agreement was urgently awaited because Athens is due to auction short-term debt on Tuesday after investors last week sent Greek borrowing costs spiraling due to fears of a possible default and doubts over the EU safety net.
Papandreou made clear in a newspaper interview that detailing the rescue plan was a last-ditch effort to deter speculation against his country.
"The question remains whether this mechanism will convince markets just like a gun on the table. If it does not convince them, it is a mechanism that it is there to be used," he told the Sunday edition of To Vima.
But Finance Minister George Papaconstantinou told reporters after Sunday's decision that Greece hoped to be able to continue to borrow smoothly on financial markets.
Skepticism over Greece's ability to manage its 300 billion euro ($400 billion) debt pile, more than its 240 billion euro annual economic output, grew last week. Investors dumped Greek stocks and bonds, and ratings agency Fitch downgraded Athens's debt by two notches on Friday.
Fitch lowered Greece's credit rating to BBB-, the lowest investment grade just above junk, saying a deepening recession and rising debt service costs would make it harder for Athens to meet its budget deficit reduction target.
The government has imposed tough austerity measures to meet a pledge to cut the public deficit by four percentage points of gross domestic product to 8.7 percent this year.
Juncker said data provided by Greece showed the fiscal consolidation program were encouraging and showed Athens was on tr...