Sri Lanka will sign a debt restructuring agreement with a group of creditor nations on Wednesday, the government said in a major step to help stabilise the country's finances following its economic crisis.

President Ranil Wickremesinghe updated his cabinet on the debt restructuring late on Monday, Foreign Minister Ali Sabry told Reuters by phone.

The cabinet also approved the debt restructuring framework, Cabinet spokesman Bandula Gunawardana told reporters, while declining to divulge details.

"The president informed cabinet the agreements with the official creditor committee will be signed tomorrow," he told the weekly cabinet press briefing.

"Details of the agreement will be presented to parliament later to ensure transparency."

The deal will allow creditor nations to resume lending to Sri Lanka. The economy crashed in 2022 when a fall in foreign exchange reserves prompted the island to default on its foreign debt.

Sri Lanka's bonds were up 0.2-0.3 cents in late Asian trading, slightly outperforming most emerging markets and maintaining the more than 15% gains made since February.

Sri Lanka's finance ministry said in November that the debt restructuring agreement in principle covered approximately $5.9 billion of outstanding public debt and involved a mix of extending the maturity of long-term borrowings and reducing interest rates on the credit.

The majority of the debt is owed to Japan and India, which chair the OCC along with France.

A provisional agreement with the OCC was reached in November.

Sri Lanka, which has roughly $37 billion in external debt, still needs to hammer out an agreement on $12.5 billion owed to private bondholders as well as a final deal with the Export-Import Bank of China on $4.2 billion in loans.

Aided by a $2.9 billion bailout package from the International Monetary Fund, Sri Lanka's economy is expected to grow 3% in 2024 after two years of contraction. (Reporting by Uditha Jayasinghe; Editing by Neil Fullick)