She told MPs 95% of the terms of exit were agreed but the Irish border was still a "considerable sticking point".
While willing to consider extending the UK's transition period beyond 2020, she said this was "not desirable" and would have to end "well before" May 2022.
Labour's Jeremy Corbyn said the Tories were "terminally incompetent and hamstrung by their own divisions".
The UK, which is due to leave the EU on 29 March 2019, has previously agreed to a so-called implementation period ending on 31 December 2020.
The PM has not ruled out the idea of extending this by up to a year to give the two sides more time to agree their future economic partnership and ensure controversial contingency plans to avoid a hard border on the island of Ireland, the so-called backstop, do not ever come into force.
Both Brexiteers and Remainers worry this would delay further the moment of the UK's proper departure from the EU, and potentially cost billions in terms of extra payments.
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