Brazil says it has won approval from the United Nations nuclear watchdog to start enriching uranium at its Resende plant.
Following months of disagreement over international inspections of the installation, Science and Technology Minister Eduardo Campos said on Thursday the Resende plant would start processing before the end of the year.
Campos added the move would put Brazil one step closer to fully mastering nuclear technology for peaceful use.
Agreement appears to have been reached with the Vienna-based International Atomic Energy Agency (IAEA) based on the agency's verification of the plant's design.
But IAEA spokeswoman Melissa Fleming said: "We are still in the process of completing our assessment of the inspection approach for the Resende plant."
Privately, however, European diplomats close to the IAEA have told journalists that a deal appears to be very close and may be concluded in a week.
The main sticking point in the negotiations between Brazil and the agency has been about a system to inspect the plant.
Brazil has insisted it would not give IAEA inspectors full visual access to the plants' centrifuges and to its technological know-how.
Odair Dias Goncalves: The design
proves peaceful intentions
Campos said, however, that a group of technicians from the agency had visited the Resende uranium enrichment plant in mid-November to verify its design.
"The visit was considered completely successful by both sides," he said. "It means that from the point of view of international safeguards, the plant can start working with UF6 uranium gas that will be enriched."
Odair Dias Goncalves, president of Brazil's National Nuclear Energy Commission, said an agreement on the design of the plant was the basis for a deal on inspections.
Washington has pressured Brazil to give IAEA inspectors full access to Resende, out of concern that Brazil's reluctance might embolden countries such as Iran to close off their atomic programmes to international inspections.
But the South American country has staunchly defended its right to produce nuclear energy, saying it has no ambitions to make nuclear weapons, which are banned under its 1988 constitution.
Brazil has the world's sixth-largest reserves of uranium and currently ships it abroad to be enriched, so it can be used at its two nuclear energy plants near Rio de Janeiro.
The government wants to be able to enrich enough of its own uranium to supply its two nuclear reactors by 2010, Campos said. It is also considering construction of a third plant.