Finance Minister Dr Abdul Hafeez Sheikh said Pakistan will receive $700 million from the Coalition Support Fund (CSF) of the United States, reported Radio Pakistan.
Sheikh added that Pakistan will also be paying two installments to the IMF in early January.
The US was expected to release $600 million in financial assistance under the CSF to Pakistan in the latest sign of improving ties between the two otherwise disenchanted allies.
The breakthrough on CSF was achieved during two days of talks between senior defence officials of the two countries in Rawalpindi, official sources said.
Defence Secretary Lt Gen (retd) Asif Yasin Malik hinted at progress on the CSF issue, saying significant headway had been made to ensure the reimbursement of held up payments under CSF, a programme designed by the US in 2001 to reimburse countries for the cost of counter-insurgency operations.
Furthermore, Pakistan requested the US to release the amount during the ongoing fiscal year so that it could bridge the budget deficit.