EU leaders have agreed in principle to extend Brexit until 31 January 2020 – meaning the UK will not leave as planned on Thursday.
EU Council President Donald Tusk said it was a “flextension” – meaning the UK could leave before the deadline if a deal was approved by Parliament.
It comes as MPs prepare to vote on proposals by Boris Johnson for an early general election on 12 December.
The SNP and Lib Dems have also proposed an election on 9 December.
A No 10 source said the government would introduce a bill “almost identical” to the Lib Dem/SNP option on Tuesday if Labour voted their plan down later, and “we will have a pre-Christmas election anyway”.
The UK was due to leave the EU on Thursday, but Mr Johnson was required to request an extension after Parliament failed to agree a Brexit deal.
The prime minister had repeatedly said the UK would leave on 31 October deadline with or without a deal, but the law – known as the Benn Act – requires him to accept the EU’s extension offer.
Mr Johnson is trying to persuade MPs to agree to a new timetable for his Brexit deal legislation and an election on Thursday 12 December.
The Lib Dem/SNP plan does not include a new timetable for his legislation – the Withdrawal Agreement Bill.
They want the 9 December because it would not leave enough time for the bill to become law before Parliament is dissolved – which must happen a minimum of 25 working days before an election.
The BBC’s political editor, Laura Kuenssberg, said it was not clear whether the government would stick to 9 December, which is a Monday, but the move implied ministers would “give up [an] attempt to get the bill through”.
It was also not clear whether the government’s “almost identical” bill would be amendable, allowing MPs to vote on issues like a customs union or another referendum.
But the BBC’s assistant political editor, Norman Smith, said Mr Johnson’s “do or die” pledge to leave by 31 October was now dead, and with many seeing this extension as no-deal being taken off the table, pressure will grow for MPs to make a decision about an election.
Labour MPs are expected to abstain in the Commons vote on a 12 December election.
It comes as government figures showed a surge in voter registrations, with nearly two million registering in the past eight weeks.
Over half of the applications – 58% – were from voters aged 34 or under, compared to just 7% for those over 65.
The swell coincided with Mr Johnson’s first proposal, in early September, for a snap election.
The EU has finally announced its informal approval of a new Brexit extension – but what an excruciatingly long and confusing political dance to get there. And the dance is not over yet.
To become a formal offer, the Brexit extension still needs to be accepted by UK PM Boris Johnson. This is EU law and an unavoidable part of the procedure.
But how uncomfortable for the prime minister who sought to distance himself as much as possible from the extension, previously promising that he would rather die in a ditch than request one.
The EU is also attaching some extra wording to the extension – including a reminder for the UK that, until it leaves, it remains a fully paid up member of the EU, including all the rights and obligations that go along with membership.
After the extension has been signed off this week, Brussels will watch, arms folded from the sidelines as the next moves are decided in Westminster.
Downing Street said Mr Johnson had not yet seen the EU’s response to his request for a Brexit delay, but would respond “once he has seen the detail”.
His official spokesman added: “His view has not changed. Parliament should not have put the UK in this position and we should be leaving on 31 October.”
Once the UK has agreed to the extension, Mr Tusk will formalise it through a written procedure among the 27 other EU nations.
MPs are due to vote on the prime minister’s election call after 19:00 GMT.
Labour has repeatedly said it will not back an early general election until a no-deal Brexit is taken off the table.
The SNP also said it would block the government’s election attempt. But it has broken with the Labour position and joined forces with the Liberal Democrats to push for an election on 9 December.
Their bill would tweak the 2011 Fixed-term Parliaments Act – the law which sets the time-frame for elections.
If passed, it would enable an election to take place with only a majority of one, rather than two-thirds of MPs.
It would also set the election date in stone and rule out any chance of the PM altering the date after MPs had voted, which he could theoretically do under the current legislation.
The SNP’s Westminster leader, Ian Blackford, said they would then fight an election “on the basis” of stopping Brexit.
He welcomed the extension from the EU, telling the BBC: “There is a responsibility on all of us to make sure we use that time to get out of the Brexit mess we are in and to get out of the impasse everybody is fed up of being in.”
Lib Dem MP Chuka Umunna claimed the plan would also prevent the prime minister “ramming through” his Brexit bill, which the Lib Dems oppose, and changing the date of an election until after the UK had left the EU.
His party leader, Jo Swinson, added: “We will keep fighting for a People’s Vote, but unless Labour wholeheartedly back it then a general election is the only way we can use this extension to stop Brexit.”
But Labour Party Chairman Ian Lavery accused the Lib Dems of “getting into bed with the no-deal Brexit Conservatives and forgetting their chums” in the People’s Vote campaign.
The leader of The Independent Group for Change, former Conservative MP Anna Soubry, sent an email to her party’s supporters accusing the SNP and Lib Dems of “turning their backs” on the People’s Vote.
“This cross-party campaign has always been clear that a People’s Vote must come before any general election,” she wrote.
“I am sorry to say that old style, selfish, tribal party politics is at play.”
The Independent Group for Change has five MPs.
Plaid Cymru, which has four MPs, said another referendum, rather than an election, was the “clearest way to end the Brexit chaos”.