Germany's ruling "grand coalition" agreed on Tuesday to end the heavy governmental subsidies to the coal industry by 2018, local reports said.

The decision was announced after a meeting of the coalition committee that coordinates policies between the Christian Democrats and Social Democrats, German news agency DPA reported.

The agreement was regarded as a breakthrough on a long-standing controversial issue in Germany, said the report.

Germany has been under EU pressure to cut state support for the country's remaining eight mines, in keeping with Europe-wide trends.

The agreement will also pave the way for Germany's coal conglomerate RAG AG to float on the stock market.

According to the agreement, the plan will be reevaluated and approved by parliament in 2012 before any subsidies are phased out.

The German coal industry employs 33,000 miners, receiving some 2.5 billion euros (3.23 billion US dollars) of subsidies each year.