The deal was reached on Saturday after Britain trimmed its rebate from Brussels to help increase overall spending in the 25-nation bloc.
"It's done," the British diplomat said after EU leaders all gave their view on the latest compromise on the 2007-2013 budget after a two-day summit in Brussels.
The deal came after Britain agreed to cut its rebate by 10.5 billion euros ($12.57 billion) over seven years and proposed a budget for the 2007-2013 period of 862.3 billion euros, or 1.045% of EU output, up from 1.03% in an earlier proposal.
The budget also included a call for the executive European Commission to review all EU revenue and expenditure, including farm spending, and report back in 2008/09.
Accord on the budget plans had been blocked chiefly by Britain's refusal to give more ground on the EU rebate which Margaret Thatcher, a former prime minister, had famously secured in 1984.
The other main sticking point was French resistance to calls for a significant reform of the EU's long-disputed farm subsidy system, of which France is the main beneficiary.