"We have reached a deal to end the shutdown and reopen the federal government," Trump said. "In a short while, I will sign a bill to open our government for three weeks, until February 15."
US lawmakers and the White House were under intense pressure to resolve the impasse, as hundreds of thousands of federal workers headed into a second month without paychecks, and the political stalemate began to disrupt some of the nation's busiest airports.
While staunchly defending his wall project -- which he claims is needed to keep out criminals and drug traffickers -- Trump made no announcement regarding his demand for $5.7 billion to fund the barrier, a key promise made to his right-wing supporters.
Instead, he said a "bipartisan conference committee" of lawmakers from the Republican-held Senate and Democrat-controlled House would set to work on the question of border security, with the issue of wall financing at the top of their agenda.
"Over the next 21 days, I expect that both Democrats and Republicans will operate in good faith," said the president -- who went on to threaten a new shutdown three weeks from now should Congress refuse to approve the funds.
"We really have no choice but to build a powerful wall or steel barrier," he said.
"If we don't get a fair deal from Congress, the government either shuts down on February 15th again, or I will use the powers afforded to me under the laws and Constitution of the United States to address this emergency."
Tribute to federal workers
Trump has spoken for weeks about using his presidential authority to declare an emergency on the US border with Mexico in order to fund the controversial project without congressional approval.
After two competing bills to end the partial shutdown failed in the Senate on Thursday, lawmakers were urgently scrambling for a fix that would get federal employees back on the job.
Normally paid every two weeks, 800,000 workers missed a second straight paycheck Friday, a situation that has reached a crisis point for thousands of American families.
The urgency was underscored as flight delays rippled across parts of the eastern US due to staffing shortages in airports where employees, including air traffic controllers, have been ordered to work without pay.
Trump -- whose administration has been accused of being deaf to the shutdown's impact -- paid tribute to those affected.
"I want to thank all of the incredible federal workers and their amazing families who have shown such extraordinary devotion in the face of this recent hardship," he said.
The president went on to reassert that many federal workers had backed him over the shutdown.
"In many cases you encouraged me to keep going because you care so much about all our country and about its border security," he said.