BRUSSELS—European Union and U.K. negotiators overcame a major hurdle to Britain’s exit from the bloc Thursday, announcing an agreement on the draft of a new Brexit deal and paving the way for a knife-edge vote in the British Parliament.

The accord was approved by the leaders of the other 27 EU countries at a summit in Brussels later Thursday. But Prime Minister Boris Johnson’s next formidable challenge will be gathering enough support from the U.K. Parliament. In a setback for the deal’s prospects, a political party allied to his government said it wouldn’t back the deal.

Following days of intense talks more than three years after Britain voted to leave the EU, the two sides struck a compromise intended to ensure a border doesn’t appear on the island of Ireland. It was the main sticking point in negotiations aimed at smoothing Britain’s split with its largest trading partner.

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