Banking regulators devised a plan Sunday to backstop depositors and protect financial institutions with money at Silicon Valley Bank, a critical step in stemming a feared panic over the collapsed tech-focused institution.

In an anxiously awaited announcement from the Federal Reserve, the central bank said it is creating a new Bank Term Funding Program aimed at safeguarding institutions impacted by the SVB failure.

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In addition, regulators said depositors at both SVB and Signature Bank in New York, which also has been closed, will have full access to their deposits.

A joint statement also said there would be no bailouts and no taxpayer costs associated with any of the new plans.

"Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system," said a joint statement from Fed Chair Jerome Powell, Treasury Secretary Janet Yellen and FDIC Chair Martin Gruenberg.

The Fed facility will offer loans of up to one year to banks, saving associations, credit unions and other institutions. Those taking advantage of the facility will be asked to pledge high-quality collateral such as Treasurys, agency debt and mortgage-backed securities.

"This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy," the Fed said in a statement. "The Federal Reserve is prepared to address any liquidity pressures that may arise."

The Treasury Department is providing up to $25 billion from its Exchange Stabilization Fund as a backstop for the funding program.

Along with the facility, the Fed said it will ease conditions at its discount window, which will use the same conditions as the BTFP.

Markets reacted positively to the developments, with futures tied to the Dow Jones Industrial Average leaping more than 250 points in early trading.

The news came after Treasury Secretary Janet Yellen said Sunday morning that there would be no SVB bailout.

"We're not going to do that again. But we are concerned about depositors and are focused on trying to meet their needs," Yellen said on CBS' "Face the Nation."

The SVB failure was the nation's largest collapse of a financial institution since Washington Mutual went under in 2008.

The dramatic moves come just days after SVB, a key financing hub for tech companies, reported that it was struggling, triggering a run on the bank's deposits.

Authorities had spent the weekend looking for a larger institution to buy SVB, but came up short. PNC was one interested buyer but backed out, a source told CNBC's Sara Eisen.

The scenario harkened back to the Sept. 15, 2008 of investment banking giant Lehman Brothers, which also found itself insolvent and in search of a buyer. The government also was unsuccessful in that case following a weekend of wrangling, triggering the worst of the crisis.

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