Read MoreUkraine: What next for battered economy?
Yatsenyuk told reporters: "If we were a commercial entity, we would be bankrupt."
This would mean a "bailout" rather than the "bail-in" model used in Cyprus, which meant that creditors were forced to take a write-down on the value of their debt. It also means that the IMF will be able to impose reforms to bring the country back to financial stability.
Bailout negotiations have taken weeks as the parties involved thrashed out the terms of the deal, and as the precariousness of Ukraine's economic situation unfolded.
"Ukraine's macroeconomic imbalances became unsustainable over the past year," Gueorguiev said.
"The (until recently) pegged and overvalued exchange rate drove the current account deficit to over 9 percent of gross domestic product (GDP), and a lack of competitiveness led to the stagnation of exports and GDP."
Hiking heavily discounted household natural gas prices is a key tenet of the deal—but this will go alongside "scaled up social protection" according to the IMF.
"Reforms to strengthen governance, enhance transparency, and improve the business climate," were also promised by Gueorguiev. Ukraine had become notorious for corruption in both business and politics. There will be particular focus on the accounts of Naftogaz Ukrainy, the state-owned oil and gas company, alongside a new law to tackle corruption in the awarding of government contracts.
The deal could help Ukraine's pro-EU contingent in May's presidential elections. However, the IMF does not want to be seen to back any particular Ukrainian horse, as there are allegations of corruption against most Ukrainian politicians who have experience of government.
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"An IMF program will be acutely difficult under any circumstances," Timothy Ash, head of emerging markets research at Standard Bank, pointed out.