The leaders of Mali's coup and neighbouring countries have reached a deal under which the two-week-old military junta will hand over power in return for the end of trade and diplomatic sanctions.

Mali's military junta and the Economic Community of West African States (ECOWAS) bloc announced the deal on Malian state television late on Friday.

Under the plan, signed by mediators and junta leader Captain Amadou Sanogo, the military government will hand over power to parliament speaker Diouncounda Traore who will be sworn in as interim president with a mission to organise elections.

Sanogo said the new prime minister and a national unity government will be put in place "in the next few days".

The deal also includes the lifting of sanctions clamped by ECOWAS on Mali and an amnesty for those involved in the coup.

The embargo included the closing of all borders of ECOWAS states with Mali except for humanitarian reasons, closing to Mali access to ECOWAS ports, and the freezing of Malian bank accounts.