FRANKFURT (Reuters) - Deutsche Bank <DBKGn.DE> has struck a deal with its German works council about closing nearly a quarter of the lender's branches in its home market, several people familiar with the matter said.

Germany's flagship lender has embarked on a strategic overhaul and cost-cutting program, announcing in 2015 that it would cut 9,000 staff positions, of which 4,000 would be in Germany.

The bulk of the job cuts agreed with the works council will be related to the shutting down about 200 of Deutsche's 723 bank branches in Germany, the people said, adding that details might be announced as early as Thursday.

"The deal is slightly on the positive side for employees," one of the people said.

German daily Sueddeutsche Zeitung reported that while Deutsche Bank had initially planned to cut 3,250 jobs at its retail outlets it had now settled for 2,600 redundancies.

Deutsche Bank declined to comment.

While Deutsche Bank is thinning out its network within large cities, it is stopping short of a broad pull-back from smaller towns, people familiar with the matter said.

Last month, Chief Executive John Cryan said the bank had made good progress in talks with the German works council.

"It's taken an awful long time to get to agreement. And we're still not quite there yet, but I am pretty confident that within the next month or two, we'll have an agreement," he said at the time.

In other European countries, mainly Spain and Poland, Deutsche Bank has closed about 40 retail branches.

In April, Cryan admitted the long negotiations were weighing on staff's mood.

"There is still a lot of uncertainty over branch closures. Uncertainty is destabilizing, it's not morale boosting. I have promised that we will have clarity as soon as possible," he told Reuters then.

(Reporting by Arno Schuetze, Andreas Kröner and Alexander Hübner; editing by Ludwig Burger and David Clarke)