The deal came after hours of talks in Vienna between foreign ministers of the five permanent UN Security Council members, plus Germany.
British Foreign Secretary Margaret Beckett hailed what she called a "far-reaching" set of proposals.
She urged Tehran to respond positively and allay fears that Iran is seeking nuclear weapons.
"We believe they offer Iran a chance to reach a negotiated agreement," Ms Beckett said. "We are now talking to the Iranians about our proposals."
Ms Beckett said Western negotiators are prepared to resume negotiations with Iran provided it suspends uranium enrichment.
The US suspects the enrichment program is a covert operation which would allow Iran to develop nuclear weapons.
However Iran insists is for peaceful atomic energy.
The British foreign minister said that if Tehran complies, the West would also suspend action in the Security Council.
Ms Beckett warned that if Iran fails to respond positively further steps would have to be taken in the Security Council.
“We urge Iran to take the positive path and to consider seriously our substantive proposals which would bring significant benefits to Iran," she said.
US officials said the package, which would be presented to Iran within days, also included a commitment to invoke "measures with teeth" if Iran spurned the gesture.
Light water reactors
Ms Beckett gave no further details about the package drawn up by the European negotiating troika of Britain, France and Germany.
However, it is thought to include a range of trade, security and technology incentives, including helping Iran build light water reactors for its civilian nuclear energy program.
According to an early draft text, possible sanctions could include an arms embargo on Iran, which go against the wishes of Russia, a key arms supplier to Iran, and China, a major consumer of Iranian oil.
The US State Department said the US had achieved the deal it wanted at the meeting.
"What we have is a commitment from our partners that if Iran (does not take the hand extended to it) the Security Council will take the measures necessary and these measures will have teeth," a spokesman said.
Iran will be given "a matter of weeks" to respond to the offer of benefits, said the official, who was travelling with US Secretary of State Condoleezza Rice.
The talks at the British ambassador's residence in Vienna also included the foreign ministers of China, France, Germany and Russia as well as EU foreign policy supremo Javier Solana.
Vienna's meeting followed a major policy switch by the United States which, 26 years after it broke off diplomatic relations with Tehran, offered to join multi-party talks with the Islamic republic if Iran suspends enrichment.
Iranian officials earlier on Thursday said they were open to negotiations, but rejected the US conditions.