The Labour leader, who was highly critical of the EU during his time as a backbencher, remained coy on the topic as he spoke to Channel 4 News.
After swerving the issue, he talked about “protecting jobs” and “understanding the needs of EU nationals” in his response.
He said: “Well, obviously we’ve got to work out what the arrangements are during the transition period and make sure we reach an agreement on that but quite clearly the priority has to be protecting jobs and also understanding the needs of EU nationals that are living here.
“We’ve already said that we would as a Labour government guarantee their rights to remain in Britain and also recognise that many of our public services wouldn’t be able to operate without EU nationals working in them.”
The policy shift comes despite the Mr Corbyn previously ruling out wanting to stay in the EU’s internal market on the BBC’s Andrew Marr Show.
He said: “The single market is dependent on membership of the EU. What we’ve said all along is that we want a tariff free trade access to the European market and a partnership with Europe in the future.”
The proposal would see Britain retaining an open-door for EU migrants and remaining under the EU Court of Justice (ECJ).
It would also prevent Britain signing new trade deals.
The shadow Brexit secretary said: “Labour would seek a transitional deal that maintains the same basic terms that we currently enjoy with the EU.
“That means we would seek to remain in a customs union with the EU and within the single market during this period.”
However, Brexit campaigners have since condemned the move.
Richard Tice, of pressure group Leave Means Leave, said: “This is one of the most astonishing U-turns in modern political history.
“By backsliding on Brexit, the Labour party has completely betrayed its manifesto commitment and the people who voted for it less than three months ago in the General Election.”
August 28th, 2017: Express