Internal divisions in Belgium had threatened to derail the deal and, once again, raised questions about the EU's ability to function as a cohesive bloc.
Canada and the European Union have spent years negotiating the Comprehensive Economic and Trade Agreement, CETA.
While all 28 EU governments back the deal, Belgium was unable to give its consent because of objections led by its French-speaking Wallonia region.
It was demanding stronger safeguards on labour, environmental and consumer standards, and also more protection for farmers facing new competition from Canadian imports.
After much deliberation, a four-page addendum has been released that Belgain Prime Minister Charles Michel says answers their concerns.
"Based on the position expressed from the parliaments, it will allow us to be in [position] to have all the power to sign this free trade agreement with Canada."
Wallonia's Minister-President, Paul Magnette, says the amendments will now be put to the rest of the European Union for approval.
"After long negotiations, we've finally reached an agreement between Belgians that will be submitted to our European partners. Wallonia is extremely happy that its demands were heard. We always fought for treaties that strengthen social, environmental norms and protect public services."
Supporters of CETA say it will increase the EU's economy by around AU$17 billion and Canada's by around $12 billion.
It will eliminate nearly all tariffs between the EU and Canada, saving European exporters about $720 million in duties.
But having watched the arguing from the sidelines, Canada's Foreign Minister Stephane Dion didn't let his guard down while commenting on the development.
"I'm cautiously optimistic. Once bitten, twice shy. We hope that the Europeans have agreed between themselves because Canada is ready to sign. But if the news you announced becomes reality, it is excellent news."
Failure to strike a deal with such a like-minded country as Canada would have seen the EU's credibility take another huge hit.
After this year's Brexit vote and ongoing disputes over the migration crisis, Germany's Vice Chancellor Sigmar Gabriel is understandably cautious.
"I think we have to see it realistically. This is an agreement that affects individual countries, so those countries will have a view about it. I believe it's a very technocratic idea to believe Brussels can decide something and everyone else will just fall in line. In reality, the national politicians are the ones who have to answer the questions. In this respect, it was reasonable that there was an internal dispute in Belgium, but I think we've achieved a lot and there is a lot more clarity now."
But anti-free trade protesters disagree.
Outside the European Commission building in Brussels, dozens of protesters condemned CETA as a danger to democracy that ignores environmental and social issues.
"It's very authoritarian trying to impose such a complicated text that's never been explained to us. When they have tried to explain it to us or we debate it, they say 'no, you didn't understand, we'll explain it differently'. That puts a stigma on civil society and political activists in such a way that they're delegitimised politically and in the media."
If the European Parliament gives it backing, CETA could apply provisionally as early as next year.
But final application could take more time after all the relevant bodies have their say.
