Paris Club creditors have agreed to cancel 50 per cent of the arrears owed by Myanmar in a deal agreed last week in France, state media reported Monday.
The group of 19 creditor countries agreed Friday to "deliver an exceptional treatment," and write off the arrears "in nominal terms in two phases," said a government statement published by The New Light of Myanmar.
"The remaining amounts will be rescheduled over 15 years, including a 7-year grace period," it said.
Norway has cancelled debts of 534 million dollars while Japan has committed to a "substantial cancellation" of arrears of more than 3 billion dollars, it said.
The move acknowledges the reforms undertaken by Myanmar's civilian government since it came to power in March 2011.
Most Western democracies have dropped or eased sanctions on the country since mid-2012.
Earlier Monday, the World Bank and Asian Development Bank said they would resume lending to Myanmar following the country's clearing of 900 million dollars in arrears via bridge loans from Japan.