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The agreement comes two weeks ahead of schedule.

During a press conference Monday evening at City Hall, Mayor Michael Bloomberg and Council Speaker Christine Quinn made the announcement.

There will still be jobs cut through attrition and layoffs, but not as many as previously proposed.

The budget also includes hundreds of millions of dollars in cuts to the Department of Education.

"We've asked our agencies, which had begun to tighten their belts throughout 2008 to do more with less and they have. With a total of more than $3 billion in gap closing actions while taking pains to protect the the core services that save lives and protect our quality of life," said Bloomberg.

"Every budget is a compromise and a negotiation as it relates to taxes. It's not just between the Council and the Mayor. It's also between the Assembly and the State," said Quinn.

As part of the nearly $60 billion budget deal, an agreement was also reached on the city's sales tax, which is now slated to go up half a percent.

The measure still needs to be approved by lawmakers in Albany.

The budget restores $16 million to keep 16 firehouses open. The city had planned to close four firehouses July 1st, and a dozen more on January 1st.

The agreement also carves out enough money for 100 Administration for Children's Services caseworkers and to keep libraries open six days a week.

The City Council is expected to vote on and approve the budget later this week.