Brussels: EU leaders on Friday agreed to move the Brexit talks to the second phase, in which they will discuss trade deals with the UK once it leaves the bloc.

At an European Council summit attended by the heads of state and government of the 27 EU member states, not including British Prime Minister Theresa May, they agreed that enough progress had been made in the first phase.

The initial phase covered the border between the UK and Ireland, the so-called divorce bill and the rights of EU citizens living in the UK and vice versa.

"EU leaders agree to move on to the second phase of Brexit talks. Congratulations PM Theresa May," European Council President Donald Tusk tweeted.

The leaders will also adopt a set of guidelines spelling out their terms for a transition period, and a rough timetable for the next few months, the Guardian reported.

Initially, the second phase of Brexit talks will be dominated by discussions over the transition period, under which the UK will continue to abide by EU law for roughly two years, but not have a role in any decision-making institutions.

European Commission President Jean-Claude Juncker warned this process would be "significantly harder".

May has been given three months to get agreement within her Cabinet on the UK government's vision of a future trade deal, after which substantive talks on the future relationship will begin.

The agreement to move talks on will be a significant relief to the Prime Minister.

Asked whether, in the wake of May's defeat in the Commons this week over Brexit legislation, the UK might still stay in the EU, Juncker added that it "depends on the British Parliament and British people".