Employees working in Iraqi Kurdistan will get their wages paid by Iraqi Prime Minister, Haider al-Abadi and have agreed to halt oil sales in return.
The Kurdistan Regional Government (KRG) said it "accepted your Excellency's proposal of the Iraqi federal government (paying) all the salaries of the employees of the Kurdistan region, who number 400,000 people."
They are owed approximately more than $747 million in unpaid wages. In their agreement, the region would "hand over all of its oil production to the federal government of Iraq, as is clearly stated in your Excellency's proposal," according to an online statement.
The KRG is on the verge of a national crisis even though there have been substantial oil revenues. Kurdish employees have protested or gone on strike in response to unpaid wages.
Massud Barzani, the region's de facto president, has said that the "time has come for a referendum on independence, but Kurdistan's financial woes effectively rule out a viable state for now.