Prime Minister Theresa May will make a speech next Friday on Britain's relationship with the EU following Brexit after her cabinet agreed a plan at a marathon meeting, her spokesman said.
One minister who was not present said they had agreed Britain would seek to align itself with European Union rules in certain sectors of the economy, but will retain the right to diverge.
May is under pressure to set out more details of her position before talks get underway on the future partnership in April, with Brussels warning Britain cannot have everything it wants.
The prime minister gathered around a dozen of her senior Cabinet colleagues for eight hours of talks at her country retreat Chequers on Thursday, in a bid to thrash out their considerable differences.
Foreign Secretary Boris Johnson, who has called for a clean break with Brussels, and Finance Minister Philip Hammond, who favours closer ties, were among those present.
"It was a very positive meeting and a step forward, agreeing a basis of the prime minister's speech on our future relationship," the spokesman said.
"The prime minister will be setting out more detail of the government's position on Friday," he added on her upcoming address.
Health Secretary Jeremy Hunt, who did not attend the gathering, said Britain would not be part of a customs union with the EU because it wanted to be able to agree trade deals beyond the bloc.
"It's one way of getting frictionless trade but it's not the only way," he told BBC radio.
He acknowledged "divergent views" among ministers, but said: "The central common understanding is that there will be areas and sectors of industry where we agree to align our regulations with European regulations.
"The automotive industry is perhaps an obvious example because of supply chains that are integrated.
"But it will be on a voluntary basis, we will as a sovereign power have the right to choose to diverge, and what we won't be doing is accepting changes in rules because the EU unilaterally chooses to make those changes."
- Labour sets out plan -
The full Cabinet will discuss the plans, likely at their regular weekly meeting on Tuesday, before May makes her speech.
The address is expected to take place somewhere in Britain, after recent big Brexit speeches in Munich, Germany, and Florence in Italy.
A few days before, on Monday, opposition Labour leader Jeremy Corbyn is expected to set out his party's vision for Brexit, with growing speculation he could call for maintaining some kind of customs union with the EU.
Any deal agreed with Brussels would have to be passed by the House of Commons, where May's Conservatives have only a slender majority.
The prime minister has pledged to leave the EU's single market and customs union, as she seeks to end free movement of migrants and the jurisdiction of the European Court of Justice.
But EU chief negotiator Michel Barnier has warned that these freedoms will come at a cost of "unavoidable" barriers to trade.
Members of the EU's customs union -- the bloc's 28 states plus Turkey, Andorra, Monaco and San Marino -- agree common customs duties, import quotas and other rules in return for allowing goods to move freely through the area.
Remaining in a customs union would resolve concerns about the return of checks on the border between EU member Ireland and Northern Ireland, part of Britain.
But members of the customs union are precluded from signing their own independent trade deals, something many eurosceptics in Britain highlight as a crucial benefit of Brexit.
© 2018 AFP