Recession-hit Argentina announced on Tuesday it has reached an agreement with three major creditors over the restructuring of a $66 billion debt as it seeks to solve its latest sovereign default crisis.

The government had set an August 4 deadline to complete a deal but it has now pushed the date to August 24 "to give effect to the agreement," which came after months of wrangling and deadline extensions.

Argentina's economy ministry said in a statement that the deal "will allow members of the creditor groups and such other (bond) holders to support Argentina's debt restructuring proposal and grant Argentina significant debt relief."

The bonds represent roughly a fifth of the country's $324 billion debt, which amounts to around 90 percent of its GDP.

A woman passes by a wall reading "No to the Debt Payment" in Buenos Aires, on August 3, 2020 -- the day before a deal was reached on restructuring of $66 billion of debt
A woman passes by a wall reading "No to the Debt Payment" in Buenos Aires, on August 3, 2020 -- the day before a deal was reached on restructuring of $66 billion of debt AFP / Juan MABROMATA

Argentina has been in default -- for the ninth time in its history -- since May 22 when the country missed a deadline to pay $500 million in interest on the debt that is subject to the current negotiation.

The deal involves the Ad Hoc, Argentina Creditor Committee and Exchange Bondholder groups, as well as "certain other significant holders," the economy ministry said.

Last month the three major groups, claiming to represent "60 percent of the exchange bonds and 51 percent of the global bonds in circulation," giving them veto power over any deal, said they had rejected Argentina's latest proposal.

Argentina had offered a deal that represented 53.5 cents on the dollar -- a significant improvement on its original starting position of 39 cents -- but the creditor groups were holding out for no less than 56.5 cents on the dollar.

Argentina