EU President Donald Tusk announced Monday that there has been enough progress in negotiations with London for him to table a proposal in response to British reform demands on Tuesday, warning that outstanding issues remain.
British Prime Minister David Cameron is seeking a series of changes to the country's relationship with the European Union before putting its continued membership in the bloc to a referendum.
Several of the issues have faced tough resistance, as they touch on basic EU rights.
"Tomorrow around noon (1100 GMT) I will table [a] proposal for a new settlement" aimed at keeping Britain in the EU, Tusk wrote on Twitter following several days of top-level diplomacy between Brussels and London.
There has been progress since meeting with Cameron in London, Tusk added, while noting that there are still outstanding issues to be resolved.
Negotiations will continue in the coming hours, an EU source said on condition of anonymity. Any deal also requires the approval of the 27 other EU member states, who have not so far been involved in the talks.
Tusk and Cameron were unable Sunday to reach agreement on all four areas in which the British premier has demanded reforms: sovereignty, competitiveness, social security and economic governance.
On Friday, Cameron also held talks with European Commission President Jean-Claude Juncker in an effort to hammer out proposals that could be put to the other 27 leaders at their next summit on February 18-19.
One of the most controversial demands is the restriction of in-work benefits for other European citizens during an initial four-year period, in an effort to curb intra-EU migration to Britain.
London announced late Sunday that progress had been made on this issue, in the form of a so-called emergency brake on welfare payments to non-British citizens that would apply if Britain can show that its social services system is overwhelmed.
"The commission have tabled a text making clear that the UK's current circumstances meet the criteria for triggering the emergency brake," Cameron's spokesperson said.
But commission spokesman Margaritis Schinas urged caution on Monday, noting that any deal needs to be approved by all other EU member states.