"We've made meaningful and unprecedented breakthrough in Copenhagen," the president said.
A senior administration official said the leaders of five key countries, including China and India, agreed to a political "accord" that will "provide the foundation for an eventual legally binding treaty."
Nevertheless, critics are dismissing the agreement as "a sham."
The accord was finalized after Obama "barged into" a meeting between Chinese Premier Wen Jiabao, Indian Prime Minister Manmohan Singh and South African President Jacob Zuma, who were discussing how they would verify any promised cuts in emissions.
"Mr. Premier, are you ready to see me? Are you ready?" Obama said to Wen, according to a pool reporter who was with the president.
The leaders proceeded to talk for roughly 45 minutes and emerged with a non-binding political accord, but Obama was unable to get the four leaders to commit to a deadline of 2010 for a legally binding international climate change treaty.
Obama said the nations will submit to international consultation and analysis of their efforts to cut emissions, similar to how the World Trade Organization examines economic progress.
It won't be legally binding and there is no set timeframe, but it will allow each country to show to the world its progress, and countries will lay out the targets in an appendix to the agreement.
The president said he hopes to make the agreement legally binding in a year, but he said it will be "very hard and take some time."
"We were modest in what we thought we could accomplish ... but believe whatever we promise we can deliver on," the president said following the meeting with the three leaders.
Environmental groups were disappointed that a more concrete agreeement did not emerge from the conference.
Friends of the Earth, in a statement, called the accord, "a sham agreement with no real requirements for any countries. This is not a strong deal or a just one -- it isn't even a real one. It's just repackaging old positions and pretending they're new."
The Chinese had for weeks been reluctant to agree to ways for the international community to verify that they're abiding by pledges to reduce greenhouse gas emissions. But today, Chinese officials agreed to report to an international monitoring mechanism, officials said.
"For the first time these emerging economies have agreed to take significant action to combat climate change," the official said, adding that the leaders of the four nations have agreed to the core components Obama laid out in his address this morning upon arriving in Denmark -- mitigation, transparency, and financing.
He defined "mitigation" as every major economy putting forward "decisive national actions that will reduce their emissions, and begin to turn the corner on climate change." The U.S. goal is to reduce greenhouse gas emissions "in the range of 17 percent by 2020, and by more than 80 percent by 2050 in line with final legislation."
Transparency, he defined as having "a mechanism to review whether we are keeping our commitments, and exchange this information in a transparent manner. These measures need not be intrusive, or infringe upon sovereignty. They must, however, ensure that an accord is credible, and that we're living up to our obligations." An agreement without that would "be a hollow victory," he said.
Third, the president pushed the world's wealthier economies to help "developing countries adapt, particularly the least developed and most vulnerable countries to climate change."
The White House has been working on getting a sign-off from the group of developing nations known as the G-77 by working with Ethiopia's Prime Minister Meles Zinawi, the official said.
President Obama flew to Copenhagen on the last day of the conference as the prospects of climate change agreement looked dim. White House officials indicated earlier today that Chinese officials were unmoving on their refusal to allow a transparent verification system, a stance that will make a deal difficult to achieve.
World leaders were looking to Obama to help break the deadlock at the climate conference.
The original goal of the climate change conference was a legally binding international treaty reducing greenhouse gas emissions worldwide, but with China has been hesitant to commit to serious greenhouse gas emission cuts and it became clear months ago that would not happen.
Leaders from more than 190 countries spent the last two weeks working on a more informal climate change agreement, but that might be out of reach too.
Obama met with Jibao for nearly an hour today to press the case that China needs to allow for transparency.
Obama and Wen directed their negotiators to work on a bilateral basis and with negotiators from other countries to see if an agreement can be reached here.
A senior White House official in Copenhagen told ABC News earlier today that the Chinese were holding their ground.
"We've done what we can here," the official said."The Chinese are dug in on transparency and are refusing to let people know they're living up to their end of the agreement."
Obama pushed for transparency, saying publicly that "we must have a mechanism to review whether we are keeping our commitments, and to exchange this information in a transparent manner. These measures need not be intrusive, or infringe upon sovereignty. They must, however, ensure that an accord is credible, and that we are living up to our obligations. For without such accountability, any agreement would be empty words on a page."
He added that the offer was on the table "if -- and only if -- it is part of the broader accord" including transparency.
In Copenhagen, negotiators had worked through the night and met for hours behind closed doors in the hopes of reaching some sort of an agreement, with U.S. officials working quickly to reach a compromise before Obama's arrival. The White House had hoped for an agreement before the president's high-stakes visit, but negotiations for a formal treaty had been doomed to failure even before the conference began.
In the last-minute push, even Secretary of State Hillary Clinton made an unscheduled appearance to urge on her international counterparts.
China has been hesitant to commit to a deal where it would be open to scrutiny by the international community. Leaders from the country have balked at measures to allow international monitors to verify emissions cuts that might be agreed to in the deal.
In the last 24 hours, officials say China had softened its opposition to verification of emissions reductions. Clinton announced Thursday that the United States will contribute to a $100 billion fund by 2020 to help poor countries cope with climate change, but that financial help is conditional on China relenting on verification, a move that could exert pressure on China.
But China and the United States appeared to be divided on the issue of verification.
The notion that the success of the climate agreements may hinge on the United States and China frustrated leaders of some developing countries.
Speaking as the voice of the developing world, Brazilian President Lula da Silva gave a passionate speech where he scolded the developed world for not negotiating on climate change in good faith with poorer nations. He also said this conference is not about climate change, but about economic opportunities for the developing world.
With an array of challenges the president has to confront at home -- from health care to unemployment to the economy -- the president is putting his prestige at stake, both at home and abroad, to fly to Copenhagen and seal a deal on an issue that lacks the support of China, one of the biggest polluters in the world.
The U.S. president usually goes on trips like this when an agreement has already been worked out, but the White House said it is not a surprise that Obama went. His job as a leader, sources say, is to lead and that's what he wants to do in Copenhagen.
Obama, whose Nobel Peace Prize win was partially attributed to his efforts on climate change, does not only face the skepticism of an international audience, but even his supporters back home. If he didn't go to Copenhagen, he would upset his liberal base.
Addressing world leaders earlier today, Obama stressed the urgency of coming together on a deal and raised the deflating prospect of a deal.
"While the reality of climate change is not in doubt, I have to be honest, I think our ability to take collective action is in doubt right now and it hangs in the balance," Obama said at a plenary session at the United Nations summit.
"This is not a perfect agreement, and no country would get everything that it wants," the president said. "But here is the bottom line: we can embrace this accord, take a substantial step forward, and continue to refine it and build upon its foundation. We can do that, and everyone who is in this room will be a part of an historic endeavor, one that makes life better for our children and grandchildren."
Obama outlined three key elements that must be in the final agreement. First, all major economies must commit to reducing their emissions. Second, there must be a transparent review to ensure nations are keeping their commitments to reduce emissions, and thirdly, there needs to be financing to help developing nations adapt to these new standards.
What world leaders do agree on are the stakes. With unprecedented urgency, a chorus of leaders have delivered the same warning -- the planet is already damaged by climate change and countries need to step up to confront this challenge.
"We have a moral obligation towards future generations," said Prime Minister of Denmark Lars Lokke Rasmussen.
UK Prime Minister Gordon Brown described the stake in apocalyptic terms Thursday.
"Without common action, extreme temperatures will create a new generation of poor with climate change refugees driven from their homes by drought, climate change evacuees fleeing the threat of drowning, the climate change hungry desperate for lack of food," Brown said. "Hurricanes, floods, typhoons and droughts that were once all regarded as the acts of an invisible god are now revealed to be also the visible acts of man."
ABC News' Karen Travers, Kirit Radia and Viviana Hurtado contributed to this report.