Following rounds of negotiations, the agreement paves the way for the Scottish Parliament to become the most powerful of its kind in the world.
Key features of the deal include new borrowing powers, allowing the government to manage its budget effectively and invest up to £3 billion in vital infrastructure.
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In addition, £200 million will be provided to implement the new powers.
Millions of pounds have already been invested in key Scottish infrastructure projects, including the M8/M73/M74 Motorway Improvements scheme, the new Queensferry Crossing and and the AWPR/B-T Project.
The deal will be confirmed once the Scotland Bill passes through Parliament later this year.
Chief Secretary to the Treasury, Greg Hands said: "I am delighted that we have agreed a new fiscal framework that is fair for Scotland and fair to the rest of the UK, now and in the future.
"I look forward to the Scottish government using these new powers to further increase the economic prosperity of Scotland."
(LM)
