The IMF has agreed a $17.5bn (£11.5bn) loan to Ukraine as part of a new economic reform programme.

The Extended Fund Facility is designed to stabilise Ukraine’s economy, restore growth and improve living standards.

On top of the IMF funding, the programme also agrees “other bilateral and multilateral funding” to a total value of about $40bn.

The World Bank will provide up to $2bn of that package and said it is “vital” that Ukraine pushes through reforms.

IMF managing director Christine Lagarde said the deal could prove a “turning point” for Ukraine.

But Ukrainian Prime Minister Arseniy Yatseniuk said that the aid package included “very difficult” reforms.

Ms Lagarde said it was an ambitious programme and not without risk.

She said: “This new programme offers an important opportunity for Ukraine to move its economy forward at a critical moment in the country’s history.”

It came as Russia’s Vladimir Putin, Ukraine’s Petro Poroshenko, and leaders of France and Germany announced that a ceasefire would begin in eastern Ukraine on 15 February,

Ms Lagarde said that the deal was “a realistic programme and its effective implementation, after consideration and approval by our executive board, can represent a turning point for Ukraine”.

Mr Yatseniuk said the IMF was demanding reforms to fight corruption, overhaul the energy sector, cut state expenditure and reduce state bureaucracy.

He said he expected a total of $25bn financial support from the IMF as part of a four-year facility, including $17.5bn to stabilise the financial situation in the country.

He added that the Ukrainian economy could grow in 2016 if “Russian aggression” was halted and internal reforms were a success.