As per the agreement, admission to the IITs from 2013 would be based only on rank achieved in the advance test subject to the condition that selected candidates are in the top 20 percentile of successful candidates of their Boards.
This formula replaces the proposed format of giving weightage to the class XII board results, which was vehemently opposed by the IITs.
The compromise was reached at a meeting of IIT Council, the highest decision-making body having representatives from government and Directors of all the 16 of these institutes.
HRD Minister Kapil Sibal, who is the head of the Council, skipped the crucial meeting which was then chaired by M N Sharma, Chairman of the Board of Governors of IIT, Madras.
"There was complete unanimity among the council members about the new format," Sharma told reporters.
He said NIT council and the IIIT council will meet early next month to evaluate the system in view of the tweaking of the proposed format.
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The government had earlier proposed a common entrance which was rejected by IIT-Delhi and IIT-Kanpur and some others were also likely to follow suit.
Sibal later said a "huge objective" had been achieved with the proposed common test despite the changes pressed by the IITs.
He felt that the government's aim of reducing pressure from students has been achieved along with a partial check on capitation fees.
The percentile ranking system of selection is expected to make admissions to the IITs tougher and more competitive, an official said. (MORE)