The World Bank is providing the Republic of Congo a debt relief package worth $2.9bn (£1.66bn).
Wolfowitz aims to tackle corruption
The money is meant to reduce the west African country's overall debt, which stands at $9.2bn.
The deal had been in doubt after World Bank president Paul Wolfowitz expressed reservations about the level of corruption in Congo.
The agreement stipulates that Congo must meet specific health and education targets to reduce poverty.
Since becoming head of the World Bank in June 2004, Mr Wolfowitz has focused on anti-corruption measures.
He suspended loans to Chad, arguing that the government in N'Djamena had broken an agreement over oil revenue controls.
Earlier this year, Mr Wolfowitz said the bank was withholding loans worth $250m (£143m) to Kenya, following its involvement in a high-level scandal.
Income from oil, Congo's main source of revenue, was $1bn in 2004 and expected to increase considerably because of higher world prices.
The World Bank's country director, Pedro Alba, said Congo's government must reform financial and structural systems at the state-owned oil company over the next two years.
Congo had to show at least two years of sustained performance before the agreement became irrevocable, Mr Alba told a conference in the Congolese capital, Brazzaville.
The country, which borders Gabon and the Democratic Republic of Congo (DRC), has been plagued by civil wars and militia conflicts in recent years.
Since a peace accord was signed with southern rebels in 2003, the country has been trying to establish peace.
The debt reduction agreement has yet to be approved by the International Monetary Fund.