Jamaica has agreed terms with the International Monetary Fund to receive a new $750m (£483m) loan.
A condition for the IMF loan is the completion of a planned debt swap.
The Caribbean nation must get private sector lenders to accept more lenient terms on its existing heavy debt load, equal to 140% of economic output.
The Jamaican government is also implementing spending cuts and labour market reforms as it seeks to deal with a serious economic crisis.
"Over the last three decades, the Jamaican economy has experienced very low economic growth, declining productivity, and reduced international competitiveness," said Jan Kees Martijn, the head of the IMF's mission to Jamaica.
"An important factor behind these problems has been Jamaica's unsustainable debt burden, which has undermined confidence and elevated risks to the economic stability."
The four-year loan still needs to be approved by the IMF's executive board, which is due to review the terms by the end of March.
By then, the government in Kingston will need to have carried out necessary economic and fiscal reforms, and to have won a "high rate of participation of private creditors" in the debt swap.
"If this debt is not reduced, Jamaica faces a dismal future," Prime Minister Portia Simpson Miller said on Jamaican TV on Monday night, explaining the need for the swap.
About 55% of government spending goes towards paying the nation's debt, while 25% goes on wages. That leaves just 20% for everything else - including education, security and health.
The swap is likely to result in a significantly lower interest rate being paid by Jamaica to its lenders.
The relatively high current interest rate reflects the low expectations of lenders that the government will ever be able to repay its existing debts in full.
Lenders have already been hit once - it is the second such debt swap by Jamaica in three years.