Cuba has reached a landmark agreement with foreign creditors over billions of dollars in unpaid debt dating back 25 years.

The Paris Club of creditor nations announced a deal Monday under which creditors will cancel $8.5 billion of overdue interest payments, in exchange for a promise by Cuba to pay off $2.6 billion of debt over the next 18 years.

France, Cuba's biggest creditor, led the negotiations.

Finance Minister Michel Sapin said the accord "helps to definitively resolve the issue of Cuba's medium-term debt... which has not been honored since the 1980s."

President Raul Castro has been working to improve relations with creditors as he tries to modernize and open up the communist island's economy.

The U.S. maintains an economic embargo against Cuba.