Cyprus has agreed to a contentious one-off levy on large bank deposits, in a dramatic about-face as the country races to seal a last-minute bailout deal to avert financial collapse.

Cyprus needs to come up with $7.74 billion by Monday in order to unlock a $13 billion rescue package with European banking authorities.

If no bailout deal is reached, Cyprus risks losing emergency funding for its stricken banks and a possible exit out of the eurozone.

Both Cyprus and its eurozone partners have talked of progress but there has been no deal done yet.

In a bid to secure the deal, Cyprus has agreed to place a 20 per cent levy on all deposits over 100,000 euros ($125,000) at the country's largest lender, the Bank of Cyprus.

The agreement with European banking authorities also includes a 4 per cent levy on large deposits at other banks.

The move is a dramatic change from Tuesday, when Cyprus's 56-seat parliament dismissed a levy on depositors as "bank robbery".

The government of Cyprus has described the bailout talks as being at a very "delicate" stage.

President Nicos Anastasiades will fly to Brussels later on Sunday to try to finalise the bailout with the EU, IMF and European Central Bank.

Earlier finance minister Michael Sarris said "significant progress" has been made.

The EU's economic affairs commissioner Olli Rehn has also said progress is being made towards a solution.

Racing to placate its European partners, Cypriot MPs also voted in a late-night session on Friday to nationalise state pensions and split failing lenders into good and bad banks - a measure likely to be applied to the second-largest lender, Cyprus Popular Bank.

They also gave the government powers to impose capital controls, anticipating a run on banks when they reopen on Tuesday.

A plan to nationalise semi-state pension funds has met with resistance, particularly from Germany which made clear that tapping pensions could be even more painful for ordinary Cypriots than a deposit levy.

The bank restructuring has also angered Cypriots.

On Saturday, around 1,500 bank workers marched on the presidency, holding banners that read, "No to the bankruptcy of Cyprus" and "Hands off workers' welfare funds".

Reuters