Mr Sanchez said on Saturday that the UK and Spain “have reached an agreement on Gibraltar”, stating any future decisions regarding Gibraltar would be made with Spain.
A draft document seen ahead of the summit on Sunday states: “After the United Kingdom leaves the Union, Gibraltar will not be included in the territorial scope of the agreements to be concluded between the Union and the United Kingdom.
“However, this does not preclude the possibility to have separate agreements between the Union and the United Kingdom in respect of Gibraltar… those separate agreements will require a prior agreement of the Kingdom of Spain.”
Mr Sanchez had said on Friday he wouldn’t back the divorce deal UK and European Union leaders are supposed to vote on during Sunday’s summit in Brussels, saying a draft agreement did not include clear language regarding Gibraltar.
Speaking after the agreement over Gibraltar was announced, Mr Sanchez said: “This is going to allow us to have direct negotiations with the UK regarding Gibraltar.”
It comes after European Union summit chairman Donald Tusk recommended that the bloc approves the Brexit deal negotiated with Britain.
He said: “I will recommend that we approve on Sunday the outcome of the Brexit negotiations.
“No one has reasons to be happy. But at least at this critical time, the EU27 has passed the test of unity and solidarity.”
In the official letter inviting EU leaders to the summit, Mr Tusk said: “The Withdrawal Agreement ensures that the rights of our citizens are fully protected, the peace process in Northern Ireland should not be affected, the UK will continue its payments to the EU budget during the transition period and legal certainty will be secured.
“Our negotiator has thereby managed to reduce the risks and losses resulting from the United Kingdom’s withdrawal from the European Union.
“The Political Declaration sets the direction as regards the future relations. We intend to work resolutely towards building the best possible relationship with the UK after Brexit, as friends and partners. And we will have around two years to work out and agree a precise framework for such cooperation.
“And if, in spite of our best efforts, additional time is needed to negotiate the future relationship, an extension of the transition period by up to two years will be possible. During these negotiations, no-one wanted to defeat anyone. We were all looking for a good and fair agreement.
“And I believe that we have finally found the best possible compromise.”
Theresa May is now facing a tough 48 hours as she visits Brussels in hopes of winning other leaders of the 27 EU states around to her Brexit deal
Though the deal has been agreed in principle, with negotiators and at a political level, the other member states have now seen it and are being given an opportunity to air their views at the summit.
With that said, the outlook does not look entirely promising for Theresa May May, as some have already voiced some already concerns ahead of Sunday.
The PM is also due to meet with European Commission president Jean-Claude Juncker and president of the European Council, Donald Tusk, this evening.