The breakthrough was announced by the Hungarian presidency of the EU Council, which hosted a meeting in Budapest with the interior ministers of Romania, Bulgaria and Austria, Euronews reported.
The three ministers signed a "joint agreement" to pave the way for full Schengen membership.
The statement highlighted the "progress" made in curbing irregular migration and asylum applications in the three countries and included a commitment to speed up the deportation of rejected applicants.
In practice, the deal means removing checks at internal land borders, which is the last remaining hurdle.
Earlier this year, passport checks at sea and air borders were finally abolished as part of Vienna's first concession.
European Commission President Ursula von der Leyen welcomed the news, stressing that Romania and Bulgaria "fully belong" to the Schengen area.
"Bulgaria and Romania belong fully to Schengen. Abolishing checks at land borders is the last hurdle. I welcome the positive results of the informal discussions in Budapest today. The next stage is a formal decision. Let 2025 bring a stronger Schengen," said von der Leyen.
Roberta Mezzola, President of the European Parliament, was equally positive, pointing out that "a stronger Schengen means a stronger Europe".
To become a reality, the Budapest agreement must be approved unanimously by member states.
Ylva Johansson, the European commissioner for home affairs, who attended the ministerial meeting, announced that the vote would take place on 12-13th of December and that "hopefully" by 1st of January land border checks would be completely abolished.
"This is a great moment. I am very happy today," Johansson said.
Bulgaria's caretaker prime minister Dimitar Glavchev confirmed the date, saying:
"Everything is going according to plan, what remains is to take the final decision on Schengen on 12 December. There will be joint action by Bulgaria, Romania, Hungary and Austria in a package to ensure that the pattern of civil flow is not distorted by the abolition of border controls."
"There will be controls to monitor the trend and respond in a timely manner. There will also be 100 people who will go to the Bulgarian-Turkish border again with the same composition - from Bulgaria, Romania, Hungary and Austria, who will monitor what happens after these changes on December 12th," Glavchev added.
The exclusion of Romania and Bulgaria from the Schengen area, which covers 450 million people and the majority of member states, has been a constant source of friction between the two countries and Austria, which is the main holdout.
Vienna argues that the continued arrival of illegal migrants is proof that Schengen is "not working" and further enlargement is not justified.
Bucharest and Sofia have disputed that claim, saying neither country is part of the Western Balkan route through which thousands of migrants enter the bloc illegally each year.
Brussels has strongly backed their applications: since 2011, the European Commission, which is tasked with assessing Schengen membership applications, has insisted that Romania and Bulgaria are "ready" to join and asked Austria to drop its veto.
The Netherlands was also initially opposed, but eventually backed down.
The breakthrough comes at a delicate time for Schengen: several member states, such as Germany and France, have reintroduced border checks in an attempt to control illegal migration, although experts doubt the effectiveness of this unilateral measure.
According to the joint statement signed on 22 November, temporary border controls will be introduced between Hungary and Romania and between Romania and Bulgaria for at least six months to "prevent any serious threat to public order and internal security". | BGNES
