Ministers of the 17-nation eurozone "have given their agreement for the sixth tranche of aid to Greece," the diplomat said, referring to debt funding provided in a 110-billion-euro rescue package for Greece agreed in May 2010.
A second diplomat confirmed the breakthrough.
The tranche of aid is crucial for debt-stricken Greece which faced running out of money to pay civil servants and pensions in mid-November.
It had been blocked since mid-September as a team of EU, European Central Bank and International Monetary Auditors scrutinised the Greek government's reform efforts.
On Thursday, the Greek parliament approved a controversial government list of even tougher austerity measures demanded by the auditors and which have sparked violent street protests.
Some 35,000 people gathered in Athens on the second day of a general strike on Thursday that crippled the public sector and much of the country.
The protests turned violent and police said a man in his fifties died in hospital. Authorities declined to speculate on the cause of death, but Greek media said he was hurt on the sidelines of the protests.
Another key sticking point is how much of Greece's debt mountain can safely be written off without spreading the debt crisis to other under-pressure economies such as Italy and Spain.
This pivotal point, however, is unlikely to be resolved before a meeting of EU leaders on Wednesday, amid differences between France and Germany over the "haircut" to be applied to Greece's 350 billion euros of debt.
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