U.S. legislators discuss the economic stimulus bill on Capitol Hill on Wednesday. (Manuel Balce Ceneta/Associated Press)

U.S. legislators have reached an agreement on a $790-billion US stimulus package meant to create millions of jobs in the country's flailing economy.

Leaders in Congress announced on Wednesday that they have reached a compromise that should see the economic stimulus legislation reach President Barack Obama's desk before the end of the week.

Obama has said he wants to have the legislation, which is the foundation of his administration's economic recovery plan, signed into law by mid-February.

The House of Representatives and Senate are expected to vote as early as Thursday on the bill, which is a compromise based on similar legislation already debated and passed in both chambers.

"More than one-third of this bill is dedicated to providing tax relief for middle-class families, cutting taxes for 95 per cent of American workers," said Senate majority leader Harry Reid at a news conference on Wednesday.

Obama has campaigned heavily for the legislation to pass through Congress quickly.

'The middle ground we've reached creates more jobs than the original Senate bill and costs less than the original House bill.'— Senate majority leader Harry Reid

The president said he welcomed the agreement that was reached.

The compromise stimulus package is "a plan that will provide immediate tax relief to families and businesses, while investing in priorities like health care, education, energy, and infrastructure that will grow our economy once more," Obama said in a written statement.

The package includes help for victims of the recession in the form of expanded unemployment benefits, food stamps, health coverage and transportation projects.

A tax cut for low- and middle-income taxpayers is also contained in the package.

The announcement about the agreement came after almost 24 hours of negotiations following the Senate approving its version of the legislation on Tuesday in a 61-37 vote.

Package scaled back

Republicans have resisted the package in both the House and the Senate, arguing that the legislation is merely expanding big government spending.

The package was scaled back by Wednesday and is lower than the $838-billion package passed in the Senate and the $819 billion passed by the House.

Officials said the cutbacks were made as a concession to moderates in Congress who want to hold down spending.

"The middle ground we've reached creates more jobs than the original Senate bill and costs less than the original House bill," Reid said.

Democrats control 58 seats in the 100-seat Senate and need some Republican support to reach the 60 votes needed to pass the legislation quickly.

To accommodate the lesser amount, a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home was also eliminated, officials said.

The bill still includes a Senate provision modifying the legislation's "Buy American" language. The provision demands that no international trade agreements be violated by the requirement that all steel and iron used in the stimulus package's infrastructure projects be U.S.-made.

The clause had raised international concerns about protectionism and resulted in warnings from Canada, the European Union and several prominent U.S. corporations that the wording could spark trade wars.

With files from the Associated Press