"Five weeks ago the idea of a transition period was quite a new concept, I think now you would find that pretty much everybody around the cabinet table accepts that there will be some kind of transition," Hammond told the BBC's Andrew Marr show.
"We're into a real process now with the start of negotiations and I think you'll find the cabinet rallying around a position that maximises our negotiating leverage and gets the best possible deal for Britain."
Brexit minister David Davis is due in Brussels on Monday for a first full round of Brexit talks.
Hammond said the government needed to provide as much clarity as possible, as soon as possible, to restore business and consumer confidence and get the economy moving.