Foreign Minister Mohammed Kamel Amr said the truce would take effect at 9 p.m. local time (2 p.m. EDT.) He made the announcement alongside visiting U.S. Secretary of State Hillary Rodham Clinton.
In Jerusalem, Israeli Prime Minister Benjamin Netanyahu confirmed the deal, saying he had agreed after consulting with President Barack Obama.
The deal is to end a week of fighting that has killed more than 140 Palestinians and five Israelis.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
A Palestinian official says a ceasefire between Israel and Hamas will be announced within hours in Cairo.
The truce agreement would end the weeklong fighting between the two sides.
In details of the agreement obtained exclusively by The Associated Press, the official said Israel would cease all military activity against the Hamas-ruled Gaza Strip and Palestinian militants would cease rocket attacks into Israel. After 24 hours of quiet, Gaza's border crossings with Israel would be opened further to allow freer movement of goods and people.
Egypt would be the guarantor of the deal, according to the official, who spoke on condition of anonymity because he was not authorized to speak to the media.