After months of delays, the International Monetary Fund has reached agreement on a second review of Iceland's IMF loan program and tentatively scheduled a meeting of its board for April 16 to consider the issue.

The IMF said on Friday that board approval of the review, held up due to a dispute over Iceland's debts to Britain and the Netherlands, would release about $159 million to Iceland, critical in helping the nation recover from a 2008 financial crisis.

Approval could also unblock financing from Iceland's Nordic partners. The IMF agreed to loans of more than $2 billion to Iceland after the country's main banks went under in 2008.

Agreement has been reached on a letter of intent for the second review under Iceland's stand-by arrangement with the IMF, the IMF mission chief to Iceland, Mark Flanagan, said in a statement.

Iceland's Economic Affairs Minister Gylfi Magnusson said during a visit to Washington this week he was reasonably optimistic that Iceland could reach an agreement with Britain and the Netherlands over debts related to failed online bank Icesave.

The dispute has held up the IMF's second review since last year.

Iceland has been trying for months to resolve the dispute, and Magnusson said there was very little separating the parties. However, he expressed concern that elections in Britain and the Netherlands could interfere with negotiations.

A spokesman for the Dutch Finance Ministry declined comment when asked whether the Netherlands would support the loan review during the IMF board discussion.

(Reporting by Lesley Wroughton, editing by Chizu Nomiyama and Jeffrey Benkoe)