Dubai World has agreed a deal in principle with its key creditors to restructure $23.5 billion worth of its debts.
Last November, the state-owned conglomerate announced it was seeking to reorganize $26 billion of its debt repayments, stunning global markets.
The new deal now needs approval from banks which are owed money but were not part of the core negotiations on how Dubai World would repay its creditors, reports Reuters.
Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments, said: "This closes the main chapter but that doesn't mean we don't have a bumpy ride ahead."
The proposal offers repayment over either a five or eight-year period, with banks given the option of opting for a higher government shortfall guarantee, a larger payment in kind coupon or a mixture of the two packages.
Last December, neighbouring state Abu Dhabi provided Dubai with a $10 billion bailout to help ease Dubai World's financial difficulties.
By Asim Shah