However Mr Trump threatened to shutdown the government again if a further agreement can not be reached over funding for the promised wall along America’s southern border with Mexico.
Today’s deal will allow the government to reopen for three weeks with a deadline of February 15 set for negotiating a permanent agreement.
The short-term fix gives closed government agencies temporary finances to allow them to reopen and pay the thousands of federal workers who have gone without pay for more than a month.
The shutdown has reached its 35th day with the row centring on the Democrats’ refusal to grant President Trump the $5.7 billion he need to build the wall.
It has forced many unpaid government workers onto the poverty line and earlier today hundreds of flights across the north-east of the United States were disrupted.
All workers are now set to receive back pay but no deal has yet been reached to allow construction of the wall to begin.
The deal has been seen as a huge climbdown for the President and a major victory for the Democrats.
In a scrambled together speech in the Rose Garden at the White House, President Trump announced a temporary stop-gap to the shutdown, allowing three weeks of talks for both sides to reach a permanent deal.
Mr Trump said: “In a short while I will sign a bill to open our government for three weeks to February 15.
“I will make sure all employees receive their back pay very quickly or as soon as possible.
“I am asking Mitch McConnel (Senate majority leader) to put this proposal on the floor immediately.”
The deal agreed today leaves discussions over Mr Trump’s wall funding demands for later talks.
The three-week temporary funding bill will see some closed agencies reopen, allowing many government employees to go back to work.
Mr Trump added he had “seen and heard enough” from Democrats and Republicans to persuade him “they are willing to put partisanship aside and put the security of the American people first”.
During the speech the President said “walls work” and claimed the Israel-Palestine wall has a “99.9 percent success rate”.
The President suggested negotiators had indicated they are in favour of the wall being built.
“They have said they are for complete border security and they have finally acknowledged that having barriers will be an important part of the solution.
“Over the next 21 days I expect both Democrats and Republicans will operate in good faith.
Mr Trump then went on to extol the virtues of his infamous wall.
He said: “Walls should not be controversial. Every border patrol agent i have spoken with has told me walls work.
“They keep crime out, they save good people from a attempting a very dangers journey from other countries.
“They keep drugs out and they dramatically increase efficiency because they allow us to patrol far larger areas with far fewer people.
“It’s just common sense, walls work.”
President Trump ended with a threat to shutdown the government again or “use the powers afforded to me under the laws and the constitution of the United States to address this emergency.”
Congress is due to vote on the deal later today.