The Bush administration has argued the programme of CIA questioning is vital for US security after the September 11 attacks, but critics have attacked it on human rights grounds, saying tough interrogations bordered on torture.
The Bush administration denied that prisoners were tortured.
Bush said of the deal: "I'm pleased to say that this agreement preserves the most single, the most potent, tool we have in protecting America and foiling terrorist attacks, and that is the CIA programme to question the world's most dangerous terrorists and to get their secrets.
"The measure also creates military commissions that will bring these ruthless killers to justice."
Bush also said he hoped Congress would send him the legislation before it wraps up its business next week.
Bush was forced to make concessions after three leading Senate Republicans challenged his plan last week and offered a rival bill that drew more Senate support.
Senators John Warner of Virginia, John McCain of Arizona and Lindsey Graham of South Carolina had said Bush's bill would undermine the Geneva Conventions' protections for war prisoners, and allow abusive interrogations and unfair trials.
Congress is trying to pass legislation to establish trial procedures for foreign terrorism suspects picked up since the September 11 attacks. The US Supreme Court struck down Bush's original programme for such trials in June.
The United States has faced international criticism for the indefinite detention of prisoners at the US naval base in Guantanamo Bay. Rights groups and others have accused the United States of torture and abuse of detainees.
Bill Frist, the Senate Republican leader, said the deal must still be shown to senators and members of the House of Representatives.
The compromise then faces likely passage in both the House of Representatives and Senate next week before Congress breaks to campaign ahead of the November elections.
McCain brushed off any talk about who prevailed in this showdown with the White House, saying: "We're all winners because we've been able to come to an agreement through a process of negotiations and consensus.
"The agreement that we have entered into gives the president the tools that he needs to continue to fight the war on terror and bring these evil people to justice."