The deal follows days of meetings between the Democrat-controlled congress and the Bush administration on how to prop up the US economy.
Last week Bush called for action over the economy with a programme worth around one per cent of US economic output, estimated at $140bn.
The ongoing subprime mortgage crisis, tight credit and rising oil prices have all contributed to fears of a US recession and a volatile global market.
Under the plan, tax rebates would be granted to more than 117 million families in the next few weeks, while individuals would get up to $600 and married couples up to $1,200, plus $300 per child.
Businesses would also be able to write off taxes for some new investments, in an effort to stimulate spending.
"I can't say that I'm totally pleased with the package, but I do know that it will help stimulate the economy"
Nancy Pelosi, Speaker of the House of Representatives
The package also includes provisions aimed at strengthening the US housing market by boosting the limits on the size of mortgages that can be financed by large mortgage companies such as Fannie Mae and Freddie Mac.
The deal was forged in negotiations between John A Boehner, Republican leader; Henry Paulson, the US treasury secretary; and Nancy Pelosi, the Democratic speaker of the House of Representatives.
Boehner said that the agreement would "serve to move along other bipartisan agreements that we can have in the future".
Pelosi had agreed to a compromise over the package by dropping increases in food stamp and unemployment benefits in exchange for gaining rebates of at least $300 for almost everyone earning a paycheque, including those who make too little to pay income taxes.
'More to come'
"I can't say that I'm totally pleased with the package, but I do know
that it will help stimulate the economy. But if it does not, then there will
be more to come,'' Pelosi said.
Harry Reid, the Democratic senate majority leader, said the plan could go through changes before being sent to George Bush, the US president, to sign in mid-February.
"We're going to take another look at it when it comes here [to the senate]," he said.
Reid said senators would also consider supplements to the package, including the Democrats' wish for an unemployment extension and, possibly, money for highway projects.