The UK has agreed a deal with the European Union over Gibraltar’s status after Brexit.

Talks on rules governing the border between Spain and the British Overseas Territory have been ongoing since the UK left the EU in 2020.

The UK said the agreement would avoid the need for checks on people and goods crossing the Gibraltar-Spain border.

For travellers arriving at Gibraltar airport, passport checks will be carried out by Gibraltar and Spanish officials.

Spanish border officials would be able to deny entry as it would be possible for British arrivals to continue their travel into Spain and the EU free-travel area without further checks.

This is similar to the system in place for Eurostar passengers at London’s St Pancras station, where travellers pass through both British and French passport control before boarding international trains.

UK Foreign Secretary David Lammy said the deal protected British sovereignty and supported Gibraltar’s economy.

He said the “breakthrough” delivered a practical solution, adding: “This government inherited a situation from the last government which put Gibraltar’s economy and way of life under threat.”

Chief Minister of Gibraltar Fabian Picardo also welcomed the agreement, saying: “I have worked hand in glove with the UK government throughout this negotiation to deliver the deal Gibraltar wants and needs – one that will protect future generations of British Gibraltarians and does not in any way affect our British sovereignty.”

Spanish Prime Minister Pedro Sanchez and UK Prime Minister Sir Keir Starmer agreed in a Wednesday evening phone call that the deal “unlocks significant opportunities to strengthen UK-Spain relations”.

Downing Street said Sir Keir also called Picardo to congratulate him on the deal and thank him for “his years of hard work, commitment, and leadership to reach an agreement”.

Gibraltar is a 2.6 square mile headland to the south of Spain.

The UK has had sovereignty over Gibraltar since 1713, although this is disputed by Spain, who claim the territory as their own.

The territory’s status and that of its border with Spain has been a key sticking point and has remained unresolved since Brexit.

An estimated 15,000 people cross the Gibraltar-Spain border every day for work and leisure.

Currently, Gibraltar residents can cross using residence cards without needing to have their passports stamped. Spanish citizens can cross using a government ID card.

But there were concerns this would end with the introduction of the EU’s Entry/Exit system later this year, causing huge delays at the border.

The UK said all sides had agreed a clause making clear the final treaty does not impact the territory’s British sovereignty.

It said there would also be full operational autonomy of the UK’s military’s facilities in Gibraltar, where the airport is run by the Ministry of Defence and hosts an RAF base.

Public opinion in Gibraltar, which has a population of around 32,000, is in favour of keeping British sovereignty. The most recent referendum, held in 2002, saw almost 99% of voters reject a proposal to share sovereignty with Spain.

The breakthrough came after Lammy met Picardo and his cabinet in Gibraltar earlier, before the pair headed to Brussels for discussions with EU and Spanish ministers.

Spanish Foreign Affairs Minister José Manuel Albares and EU trade chief Maros Sefcovic both hailed the deal as “historic”, with Sefcovic saying it “reinforces a new chapter” in the EU-UK relationship.

All parties have committed to finalising a UK-EU treaty text on Gibraltar as quickly as possible, the UK government said.

However, Reform UK criticised the deal, with deputy leader Richard Tice saying: “Once again this Labour government have shown utter disregard for our overseas territories. This is another surrender.”

Conservative shadow foreign secretary Priti Patel said her party would examine the full legal text of the treaty to see if it met their “red lines”.

“The Conservative Party in government, and now in opposition has always been clear that any deal must ensure that the sovereignty and rights of Gibraltar are safeguarded in full and must carry the support of the government and people of Gibraltar, as well as protect constitutional arrangements. We also consistently opposed any efforts by Spain to disrupt the flow of goods at the border,” she said.

“Gibraltar is British, and given Labour’s record of surrendering our territory and paying for the privilege, we will be reviewing carefully all the details of any agreement that is reached.”

Liberal Democrat foreign affairs spokesman Calum Miller said the agreement brought the UK “one step closer to a proper trade deal with the EU” but added that “it’s vital that Parliament is given the opportunity to scrutinise the details”.