The move follows long negotiations between the smaller governing parties (the Centre, Liberal and Christian Democrat parties) who have long argued for more rights for undocumented migrants, and the Moderate Party, which has opposed the idea.
The Moderates have argued that giving such entitlements would legitimize people who have no right to be in Sweden.
The parties say there are still a number of questions to resolve, including the issue of who will pay for illegal immigrants' healthcare or the kind of care and education to which they will be entitled.
Social Affairs Minister and Christian Democrat leader Göran Hägglund said the changes would cost "a few hundred million kronor" per year, but added:
"Compared with the total cost of healthcare, that's nothing."
Education Minister and Liberal leader Jan Björklund said he hoped that the children of illegal immigrants would be able to start attending Swedish schools from 2012, adding that his preliminary calculations suggested that this would cost taxpayers 50-100 million kronor per academic year. He said this compared to the total cost of 100 billion kronor for running Sweden's compulsory schooling.
Centre Party leader and Industry Minister Maud Olofsson said that the deal would also allow illegal immigrants to start companies:
"We have now included in the agreement that it should be easy to come to Sweden regardless of whether you are a businessperson or an employee," she said.
The minority government will need support from at least one opposition party to pass the measures. Olofsson said she hoped the Green Party would support the moves, despite not having been involved in negotiations. A parliamentary vote is not expected until early 2012.