The breakthrough would pave the way for the establishment of a mixed presidential-parliamentarian form of government.
Members of the opposition say it could spell the end of six days of protests aimed at forcing President Kurmanbek Bakiev and his team to usher in sweeping reforms or resign.
The deal was reached late today by a joint conciliation commission made up of representatives from both sides in the standoff.
More than 10,000 opposition-led demonstrators gathered in central Bishkek today to pressure Bakiev's government in a protest that has continued with varying intensity since November 2.
Hundreds of pro-presidential protesters turned up today to oppose those calls. Police intervened at least once when scuffling broke out between the two camps, with several people requiring medical treatment.
Under the agreement, the new draft will be examined on November 8 at a plenary session of parliament.
One of the organizers of the Bishkek protest, Azimbek Beknazarov, told RFE/RL after the compromise was announced that the demonstrations are likely to end if the draft constitution is adopted at that session.
"If we were to wholly adopt the [draft] constitution tomorrow, then I suppose all the rallies will cease," Beknazarov said. "We, the opposition, have been saying that from the beginning: 'If the constitution is adopted, the rally will end.'"
The new draft constitution envisages the creation of a larger legislature with broader powers. By contrast, the prerogatives of the president would be reduced.
As part of the compromise, both sides agreed to not organize presidential or legislative elections until 2010.
Tensions have been high since the antigovernment demonstration began in Bishkek on November 2, particularly with memories of the uprising that forced longtime Kyrgyz President Askar Akaev to flee to Russia in March 2005.
Those events led to Bakiev's election as president in July 2005 and former oppositionist Feliks Kulov's role as prime minister.