The White House and top Republicans struck a dramatic deal to avert huge New Year tax hikes and postpone automatic spending cuts that had threatened to send the US economy into recession.

After months of agonizing over the crisis, weeks of debate about a possible solution, and days of intense, closed-door negotiations, members of the US Senate voted overwhelmingly 89-8 at around 2 am on Tuesday to pass a controversial bill that averts the so-called "fiscal cliff."

It now goes to the House of Representatives, which was expected to hold a vote on the measure late on New Year's Day. US President Barack Obama in a statement urged the House to pass it without delay.