Four government departments have agreed to cut their spending by a mean of 30% over the next four years, Chancellor George Osborne is to announce afterwards.
The local government transportation and environment departments, plus the Treasury, all have agreed deals ahead of the spending review on 25 November.
The reductions are expected to help the UK economy back into surplus, he will say.
A Treasury source told BBC News the arrangements were “really great progress”.
The departments will likely be expected to cut on day to day spending over the next four years via a combination of low worth programmes that are closing and efficiency savings.
Discussions are continuing with other sections, the source added.
No one knows when the next economic crisis to hit our world will come, or what it will likely be. But we know we haven’t abolished boom and bust
Chancellor George Osborne,
The chancellor has requested government departments to come up with savings as high as 40% by the conclusion of the present parliament.
In a speech after in London, Mr Osborne will warn that in case the government does not command spending there’s a risk of loss of confidence in the market.
“The deficit could bring our nation down,” George will say. “While debt is high, our economic security is in danger.
“No-one knows what the next economic crisis to hit our world will be, or when it’ll come. But we know we haven’t abolished boom and failure.”
One department which hasn’t yet reached an agreement is the Department for Work and Pensions, from where Mr Osborne is seeking GBP12bn.
Universal Credit is a brand new form of advantage designed to support individuals who are following out of work or a low income.
It’s replacing six existing benefits – income-based jobseeker’s allowance, income- housing benefit and support allowance, income support, child tax credit, working tax credit, and related employment.