The long-running dispute between Starbucks and the Ethiopian government was close to being resolved last night after the two sides said they had reached an outline agreement over the country's ownership of its premium varieties of coffee.

A deal could represent a significant victory for the impoverished east African country. It had been thwarted by Starbucks in its attempt to get a higher price for its coffees, which would earn its farmers tens of millions of dollars extra each year.

Officials on both sides said yesterday that after two days of talks they had agreed in principle to sign a licensing, distribution and marketing agreement that recognised the importance and integrity of Ethiopia's speciality coffees - Harar, Sidamo and Yirgacheffe.

This agreement would extend their collaboration on marketing Ethiopia's high quality coffees, they said. Details of a deal, including the price Starbucks would pay for Ethiopian coffee, would be revealed this month.

The head of the Ethiopian intellectual property office, Getachew Mengistie, said: "Our approach to trademarking and licensing these coffee brands, that originate in and represent the best of Ethiopia's coffee heritage, is a new approach that not only meets the needs of small Ethiopian fine coffee farmers and traders but also the coffee roasting and distributing companies and their customers."

The Starbucks chairman, Howard Schultz, said: "Ethiopia is recognized as the historic birthplace of coffee and the source of some of the finest coffee in the world. We're extremely excited to continue to deepen our relationship with the government of Ethiopia."

Oxfam welcomed the news but looked forward to a final agreement. It launched a campaign against Starbucks last October because of the Seattle-based coffee chain's effective blocking of Ethiopia's attempts to trademark its coffee beans in the United States.