Labour will support George Osborne's fiscal charter designed to guarantee "budget responsibility", the shadow chancellor has said.
But John McDonnell has insisted the Opposition will adopt a different approach to the Government and seek to protect low and middle-earners.
He added the party will oppose the tax cuts proposed by the Conservatives and would look at measures to tackle tax evasion and avoidance, noting the Chancellor's plans for an overall surplus is "economic illiteracy".
The MP for Hayes and Harlington made the pledge ahead of this weekend's Labour Party conference as he attempts to reassure voters his party are not "deficit deniers".
The anti-austerity stance which helped propel Jeremy Corbyn to the leadership of the party has led to critics - including the Conservatives - claiming Labour cannot be trusted with running the economy.
Voter concerns over the party's economic record have also been cited as a reason for their general election defeat in May.
But Mr McDonnell, in an interview with The Guardian, has sought to counter the criticism by announcing his desire to see Labour MPs support the Chancellor's new fiscal charter.
Mr Osborne's proposal, revealed in July's Budget, commits the Government to keep debt falling as a share of GDP each year and achieve a budget surplus by 2019-20.
After this date, governments will be required to ensure there is a surplus in "normal times", which includes when there is not a recession.
Speaking to The Guardian, Mr McDonnell said: "We accept we are going to have to live within our means and we always will do - full stop.
"We are not deficit deniers."
The shadow chancellor also told the newspaper: "We will support the charter. We will support the charter on the basis we are going to want to balance the book, we do want to live within our means and we will tackle the deficit."
On Labour's approach to reducing the deficit, he explained: "We will tackle the deficit but the dividing line between us and the Tories is how we tackle it.
"Our basic line is we are not allowing either middle or low-earners or those on benefit to have to pay for the crisis. It is as simple as that."
A spokesman for Mr Corbyn also dismissed reports suggesting the Labour leader is planning to use his conference speech to apologise on behalf of the party for Britain's involvement in the Iraq War.
The Labour leader's spokesman said: "Jeremy Corbyn said during his election campaign that he would apologise for the Iraq War.
"He does intend to, but it will not be at the Labour conference."
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