The vote was delayed after Prime Minister Benjamin Netanyahu accused Hamas of seeking last-minute concessions, which the militant group denied.
Protesters blocked one of Tel Aviv's main roads on Thursday night (16 January) as they called for all remaining hostages in Gaza to be released.
Netanyahu's pre-dawn statement appeared to clear the way for Israeli approval of the deal, which would pause the fighting in Gaza and see dozens of hostages held by militants in the Strip released in exchange for Palestinian prisoners held by Israel.
This comes after a ceasefire agreement was reached between Israeli and Hamas negotiators, a first step in ending the conflict that has been raging for around 15 months.