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British residents of Spain can now exchange their driving licences for Spanish ones, ending the long-running dispute which has caused plenty of worry and heartache for British residents, according to Spain's EFE news agency.

The deal comes into force this Thursday.

After a nearly a year of waiting, Spanish and British citizens who hold a valid driving licence in either of the two countries will now be able to apply for an exchange in the country where they have established their residence without the need to take an additional practical or theoretical test.

The Council of Ministers in Madrid this afternoon approved the agreement whereby Spain and the United Kingdom will proceed with the reciprocal recognition and exchange of driving licences, as well as the exchange of information on traffic offences , the Ministry of the Interior has announced.

This agreement puts an end to the successive extensions applied for the exchange of licences between the two countries that had been in place since the end of the transitional period provided for in the Agreement on the withdrawal of the United Kingdom from the European Union.

From now on, holders of a valid and current driving licence issued by either state will be able to apply for the exchange of their equivalent driving licence where they have taken up residence, without being subject to any additional practical or theoretical test requirements.

With this agreement, those British citizens resident in Spain who had not had their driving licence recognised before Brexit, nor in the successive extension periods, will be able to do so from Thursday 16 March.

A period of six months has been granted during which British citizens can drive around Spain with their original licence while they process the exchange.

In addition, Spain and the United Kingdom with share information on driving offences.
The British Embassy in Madrid advised British residents in January of the pending agreement and advised those still needing to exchange their licences to take a psicotécnico test as a certificate showing you have passed the test will be needed in order to exchange your licence.

Certificates are valid for three months and if you fail it you can retake as many times as you need.
If you haven’t done it before, the psicotécnico is a short test to check your eyesight and reactions.
You may also have a brief interview with a doctor. These are the official locations listed by the DGT (https://www.dgt.es/.../centros-reconocimiento-conductores/).
Further details will be forthcoming.