After a marathon eight days of talks in Switzerland that many critics expected would produce very little, EU foreign policy chief Federica Mogherini announced that Iran's nuclear "enrichment capacity and stockpile would be limited" as part of the preliminary deal.

The negotiations between the group known as P5+1 – the US, UK, France, China and Russia plus Germany – would now move into the drafting phase, with the aim of producing a final agreement by June 30, she said.

The International Atomic Energy Agency – responsible for monitoring nuclear facilities – would have access to enhanced technologies to clarify past and present issues with Iran's much-criticised nuclear program, Ms Mogherini said.

Under what is being termed a "general understanding", Iran will no longer be able to enrich uranium at its underground nuclear facility at Fordow, which will be converted to nuclear physics research centre.

The operation of another key nuclear centre, Arak, which inspectors feared could produce plutonium, would also be significantly reduced as part of the draft agreement.

It is understood Iran has agreed to reduce the number of centrifuges – used to enrich uranium – from 19,000 to around 5000 at its Natanz plant as well as limit its stockpile of enriched uranium from about 8 tons to 300 kilograms.

Once these milestones are met, the US and the EU would lift the economic sanctions that have crippled Iran's economy for the last several years.

Monitoring provisions would be in place for 10, 15 and 20 years, while others will be in place indefinitely.

For Western countries, the main concern has been preventing Iran from being able to rapidly develop a nuclear weapon. For Iran, the priority has been relief from a punishing regime of sanctions that has brought its economy to a standstill and caused considerable hardship for its citizens.

Iran's breakout timeline – the time that it would take for Iran to acquire enough fissile material for one weapon – is currently assessed to be two-to-three months. That timeline will be extended to at least one year, for at least 10 years under the framework.

US President Barack Obama described the deal as "historic", saying if the agreement reached today was fully implemented it "will prevent [Iran] from obtaining a nuclear weapon.

"If this framework leads to a final comprehensive deal, it will make our country, our allies and our world safer," President Obama said, stressing the agreement was based on "unprecedented verification".

"If Iran cheats, the world will know it."

In an upbeat media conference following the announcement, Iran's Foreign Minister Javid Zarif, said "we made history last night … we have stopped a cycle that is not in the interest of anybody".

Of the reciprocal arrangements in the agreement, he said: "We are not looking for an excuse to violate, we are looking for safeguards if one side decides to violate."

Britain's foreign secretary, Philip Hammond, said, "This is well beyond what many of us thought possible even 18 months ago and a good basis for what I believe could be a very good deal."

Israel's Prime Minister Benjamin Netanyahu, a long-time critic of any deal with Iran, vowed to fight the agreement in the coming months.

Although he had yet to issue a formal statement, he tweeted: "Any deal must significantly roll back Iran's nuclear capabilities and stop its terrorism and aggression."

Intelligence Minister Yuval Steinitz said the deal was "disconnected from the sad reality" of the region.

Arms control groups responded positively to the announcement, with the Arms Control Association saying the deal "promises to lead to one of the most consequential and far reaching nuclear non-proliferation achievements in recent decades."

"It can significantly reduce the risk of a destabilising nuclear competition in a troubled region and head off a potentially catastrophic military conflict over Iran's nuclear program," the association's executive director Daryl Kimball said.

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