Five of the poorest countries in Latin America and the Caribbean are to have their national debts cancelled by the Inter-American Development Bank (IDB).
Bolivia, Guyana, Haiti, Honduras and Nicaragua owe a total of more than $4bn (£2bn).
The debt relief initiative is part of the IDB's goal to cut poverty in half in Latin America by 2015.
Some pressure groups have called for more measures to help these nations improve education and health systems.
'Fresh start'
The draining burden of debt has immobilised the ambitions of the region's poorest nations for years.
But now the IDB is to write off a total of $4.4bn (£2.3bn).
Honduras and Bolivia alone are at least $1bn (£500m) in debt to the bank.
Speaking in Guatemala City ahead of the bank's annual meeting, its president, Luis Alberto Moreno, described the move as an historic opportunity that will give these countries what he called a fresh start.
The bank will also provide additional funding for other countries - including Ecuador, Paraguay and El Salvador - to enable them to free up resources for education and health care.
'Failed policies'
There had been suggestions that some of the bank's larger member states like Mexico, Brazil and Argentina had resisted the move to cancel debt - but that has now being played down.
Yet some groups have urged the bank to do more.
The Washington-based Food and Water Watch called on it to abandon what it described as failed policies such as the privatisation of water utilities.
Others, like the organisation Amazon Watch, want the bank to be more cautious in its investments, which they claim could harm the environment.
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