The Premier League and the EFL have agreed a £250million rescue package to protect lower-league clubs from going under amid the coronavirus pandemic.

The EFL said a fund of £50million in the form of a grant and monitored grant payments has been agreed for League One and Two clubs while the Premier League will provide a further financial commitment to assist the EFL in securing a £200m loan facility that clubs in the second tier will be able to utilise interest-free.

The news follows months of negotiations between the two governing bodies.

EFL chairman Rick Parry said: “Our over-arching aim throughout this process has been to ensure that all EFL clubs survive the financial impact of the pandemic.

“I am pleased that we have now reached a resolution on behalf of our clubs and as we have maintained throughout this will provide much-needed support and clarity following months of uncertainty.

“I would like to thank (chief executive) Richard Masters and (chairman) Gary Hoffman for their efforts on behalf of the Premier League, and of course their shareholders, for making this welcome, tangible commitment to the professional game at a time when it has needed it most.”

Masters said: “The Premier League is a huge supporter of the football pyramid and is well aware of the important role clubs play in their communities.

“Our commitment is that no EFL club need go out of business due to Covid-19.

“All football clubs continue to suffer significant financial losses as a result of the pandemic, but Premier League shareholders today unanimously agreed to provide additional funding and support for EFL clubs in real financial distress.

“We are very pleased to have reached this agreement and we stand together with the EFL in our commitment to protect all clubs in these unprecedented times.”

The package for Leagues One and Two is understood to be £30million to be split between the 48 clubs in those divisions, plus access to a further £20million package of monitored grants.

The £30m will be paid immediately from the Premier League to help cover lost matchday revenue. Each club in League One will receive a minimum £375,000 and each club in the division below will get a minimum £250,000.

The remaining £15million of that pot will be divided using a calculation of lost gate revenues which will be approved by the Premier League and the EFL.

The £20m monitored grants can be applied for by clubs in need, with a joint EFL and Premier League panel ruling on eligibility.

Clubs receiving a monitored grant will be subject to certain restrictions, in respect to transfer spend and player wages. The grant will be payable if restrictions are breached.

The Premier League has committed to cover up to £15million in interest and arrangement fees to enable a £200million loan to be secured for Championship clubs.

The loan facility is intended to support Championship clubs to meet PAYE liabilities up to June 30, 2021.

It is understood loans will be capped at £8.33m per club, with the EFL able to claw back any monies by withholding portions of future solidarity money.

Clubs in breach or suspected to be in breach of EFL regulations will not be able to access the loan facility and any club receiving a loan must maintain compliance with EFL regulations.

The two organisations had been criticised for their failure – until now – to reach an agreement.

The Government has consistently said that the Premier League, rather than the taxpayer, must provide assistance to the EFL, and Culture Secretary Oliver Dowden said: “I warmly welcome this deal between the Premier League and the EFL which provides up to £250million support to help clubs through Covid.

“I’m glad that football has come together to agree this substantial package. Fans are starting to return and we look forward to building on this as soon as it’s safe.

“With a £250million support package for men’s elite football and £300million Government funding for women’s football, the National League and other major spectator sports we have fuel in the tank to get clubs and sports through this.”

The full £250million value of the package is significant, as this was the figure for lost revenue Parry had previously given and was the amount proposed within the highly-controversial Project Big Picture plans which emerged in October.

A previous £50m offer from the Premier League to clubs in Leagues One and Two, understood to comprise of £20million in grants and £30million in loans, was rejected by the EFL on October 15 on the basis that it made no provision for clubs in the Championship.

The leagues were also heavily criticised by Julian Knight, the chair of the Digital, Culture, Media and Sport committee, who described the leagues as “fighting like cats in a sack”.

He asked them last month to give the committee weekly progress reports on the bailout talks, which he said would then be posted on social media.