The agreement covers a transitional period starting on the day the UK leaves the bloc on 29 March 2019 until 31 December 2020.
During this period new EU migrants will be granted the same rights and guarantees as those that arrived before Brexit.
The trade body says the agreement will provide “peace of mind” to employers and allow them to begin drawing up plans for their businesses post-Brexit.
Research by the British Hospitality Association (now part of UKHospitality) estimates that 700,000 EU migrants work in the UK hospitality and tourism sector.
“A full right to remain during the transition period with a chance to work towards full status, will provide non-UK EU workers with an opportunity to come to the UK with a sense of security and stability,” says UKHospitality chief executive Kate Nicholls.
“With a significant portion of the UK’s hospitality workforce coming from outside the UK, this is the clarity and assurance that we have been calling on the Government to deliver.
“The Government needs to now communicate this message as widely as possible to reassure businesses and their employees and to make sure that EU citizens are aware of the opportunities that still exist to them.
“The next step is for the Government to begin, in earnest, putting in place the framework for the future immigration policy at the soonest opportunity.”
The agreement still needs to be signed off at the European Council summit later this week.
UKHospitality is a new trade body created as a merger between the British Hospitality Association and Association of Licensed Multiple Retailers last month. It represents over 700 member companies operating 65,000 sites.