Senate and House proponents of repealing the military's "Don't Ask, Don't Tell" policy have reached a compromise, a senior Senate Democratic aide tells Fox, that would eventually allow gays to serve openly in the armed forces.

“Yes, a compromise was reached that would implement repeal after the DOD report and certification by the POTUS and DOD," the aide said.

This would comport with a request made recently by Defense Secretary Robert Gates, who favors the repeal, that any scrapping of the 1990's-era law wait for a full review going on now at DOD on implementation.  That review is expected to wrap up in December.

The major players here:  Senate Armed Services Cmte Chairman Carl Levin, D-MI, Sen. Joe Lieberman, I-CT, and Iraq war veteran and Cong. Patrick Murphy, D-PA.

The three, according to Levin, have outlined their position in a letter to the Pentagon.  "It authorizes DOD to repeal," Levin said, but he would offer no more detail, as the negotiations are sensitive.

This will play out on the House floor later this week, when Murphy offers an amendment to the annual defense spending blueprint bill known as the Defense Authorization.  The measure is opposed by the House Armed Services Committee Chairman, Ike Skelton, D-MO, who is facing a difficult re-election back home.

In the Senate, the measure will be debated and voted on in the Armed Services Committee later this week in closed session.

It is unclear how the vote will go in that committee, though the senior Senate Democratic source said, “We are optimistic, now that there is a compromise agreed to by DOD.”

Most committee Republicans are expected to oppose the measure, including war veteran Sen. John McCain, R-AZ.  Sen. John Cornyn, R-TX, a committee member, told Fox earlier this year, after the President proposed a repeal in his State of the Union address, "At a time when we're putting our men and women through long deployments, it's really not a good idea to engage in social engineering in the military."

The committee is divided 14 to 12, with Democrats in the majority.  Sen. Ben Nelson, D-NE, has said he does not support repeal, but a spokesman for Sen. Susan Collins, R-ME, tells Fox, "She is likely going to support Lieberman."  So that would be a wash.

The vote is expected to be close and could come down to the vote of the Senate's newest member, Sen. Scott Brown, R-MA, who has said he wants to consult with the generals before making any decision.

Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, supports repeal, though some generals have indicated opposition.

Pentagon Spokesman Bryan Whitman provided the following statement to Fox's Justin Fishel, "Congress has apparently chosen to address this issue this week and we are trying to get a better understanding of the legislative proposal they will be considering."