The European Central Bank and Ireland have reached a compromise on a long-standing dispute over the cost of servicing money borrowed for a failed bank, a source involved in the discussions told Reuters on Thursday.

"A deal is done," the source said, declining to give details. ECB President Mario Draghi was due to comment on the deal during a news conference at 1.30 p.m. British Time.

Dublin had wanted to avoid having to pay 3.1 billion euros a year until 2023 to service a promissory note it issued to underwrite failed Anglo Irish Bank during a meltdown of the main Irish lenders after a real estate bubble burst in 2008.

Analysts say such a deal should help Ireland successfully exit its bailout programme this year.

(Editing by Mike Peacock)