Theresa May has proposed an "implementation period" of "around two years" after Brexit.
During this period, existing market access arrangements between Britain and the EU would still apply.
The Prime Minister pitched the proposal during a speech in Florence this afternoon.
May also promised that Britain would honour its financial commitments during her speech, which carried a conciliatory tone as she attempts to build bridges with Brussels.
She promised that no other EU member will have to "pay more or receive less" over the remainder of the EU budget plan.
The Tory leader also said that Britain has no interest in harming the EU, and indeed wants to see the bloc succeed once Brexit is complete, while insisting that "we will always be a champion of economic openness."
The week's news has been dominated by a rift between May and her Foreign Secretary Boris Johnson, but reports suggest the pair have now agreed a truce on Brexit and put their differences to one side.