"Today our Trade Commissioner (Peter) Mandelson and (Chinese Commerce) Minister Bo Xilai ... made it possible to have an agreement for an equitable way to share the burden of unlicensed goods blocked in our ports," European Commission President Jose Manuel Barroso told a press conference.

"Once again, we have shown that it is possible when there is real goodwill to achieve the objectives and priorities to solve all issues between China and the European Union."

While no details of the accord were released, Chinese Premier Wen Jiabao said he was confident it would work for all concerned.

"The agreement that they will sign is fair and equitable to both sides and beneficial to the business community and consumers," he said.

In Brussels, the European Union's executive said representatives of its 25 member states were currently meeting to discuss the agreement and experts from the sector would also hold talks later on Monday.

Millions of Chinese textile items including sweaters (pullovers), trousers, blouses, T-shirts, bras and tonnes of flax yarn are impounded at European ports because they exceed import quotas agreed by both sides in June.

That deal, in which the two sides agreed to curb the growth in imports of 10 Chinese textiles and clothing products to between eight and 12.5 percent per year until the end of 2008, narrowly avoided a trade war.