Egypt will receive $2.75bn immediately, with the rest subject to its economic performance and further reforms.
IMF Managing Director Christine Lagarde said the bailout would "address longstanding challenges".
Egypt's President Abdul Fattah al-Sisi is facing high unemployment and a budget deficit of 12% of GDP.
The country has struggled to attract foreign investment since the political turmoil in 2011 and the so-called Arab Spring, which saw former president Hosni Mubarak overthrown.
