The diplomatic spat which threatened to derail the Brexit process was resolved after a clarification about the legal position and emergency talks involving Mr Sanchez, European Council president Donald Tusk and European Commission president Jean-Claude Juncker.
The chairman of European Union leaders, Donald Tusk, stressed the European Union would ratify the Brexit deal in time for the Brexit day on March 29, 2019 and was determined to build "as close as possible a partnership" with Britain in the future.
The British Prime Minister Theresa May will still have to get the deal approved by the United Kingdom parliament, where she faces a formidable task to win a majority in the 650-member House of Commons.
In an open letter to the nation, May said she would campaign "heart and soul" to get her Brexit deal through Britain's parliament - an increasingly unlikely prospect given stiff opposition from some of her own Conservative Party lawmakers and allies in Northern Ireland's Democratic Unionist Party (DUP) alike.
"Some said it [Brexit] would not cost anything and it would actually bring about some positive financial elements for the United Kingdom", he said.
The deal will nearly certainly come with steep costs for both sides, leaving leaders in the extraordinary position of negotiating a split that they nearly all believe will harm their citizens.
May echoed the insistence by several European Union leaders on Sunday that there was no possibility of reopening negotiations, if parliament says no.
Mrs May has written a letter to the British public pleading for their support for her Brexit deal, as the European Union prepares to sign it off.
At Sunday's press conference, she again refused to rule out resigning if the deal is rejected by parliament next month, saying: "It's not about me".
Irish Prime Minister Leo Varadkar said he thought May's chances of getting the agreement through Parliament were strong.
European Commission president Jean-Claude Juncker warned Theresa May she can not expect to get a better deal if MPs vote down her plan.
"We have a promise, a commitment, from the British government saying they are ready to. guarantee that they will go along with the clarification we have requested", he said.
Samantha Sacramento, the housing minister of Gibraltar - the British territory which has become a last-minute sticking point ahead of the European Union summit - also addressed attendees Saturday.
"Those who think that, by rejecting the deal, they would get a better deal, will be disappointed", Juncker said.
The deal must still be ratified by the European Parliament, something that its president, Antonio Tajani, said would likely take place early in 2019.
Arlene Foster said in Belfast on Saturday that the deal agreed by Prime Minister Theresa May is unacceptable and must be improved upon in the weeks ahead.
Euroskeptics in May's Conservative Party hate the withdrawal agreement and are vowing to oppose it because it forces the U.K.to keep close to the EU's trade rules.
"I want that to be a moment of renewal and reconciliation for our whole country", she writes.
Although the United Kingdom m ay be divided, anti-Brexit activist Femi Oluwole comments that the withdrawal agreement unites both sides over their disdain for the deal.
European leaders rallied behind May after signing off the deal within minutes on Sunday morning.
The small DUP has an outsize role because its support has been crucial to May's shaky government, which doesn't enjoy a majority in Parliament.
The 27 leaders of the bloc met without Prime Minister Theresa May to endorse the agreement, which sets the stage for Britain exit from the bloc on March 29.
"España will lift its veto and vote tomorrow in favour of the Brexit deal", Spanish Prime Minister Pedro Sánchez announced.
But regardless of how it will all end, one thing is certain: "we will remain friends until the end of days, and one day longer", commented Tusk with a smile.