The deal will see rebel leader Riek Machar return to government as one of five vice-presidents.

He and President Salva Kiir signed the agreement in neighbouring Sudan.

Tens of thousands of people have been killed and millions displaced in the conflict which broke out about two years after South Sudan's independence.

South Sudan seceded from Sudan in 2011 but plunged into conflict in December 2013 following a power struggle between Mr Kiir and Mr Machar.

Previous attempts to find a solution to the conflict have failed.

"An agreement on outstanding issues has been signed and this agreement expresses the commitment of all parties to a ceasefire," said Sudanese Foreign Minister Al-Dirdiri Mohamed, who helped to broker the deal.

Analysis: 'Peace is more than a signature'

South Sudan expert Peter Martell tells BBC's Newsday:

This is essentially the same agreement that was signed in 2015 which collapsed a year or so later - with Mr Machar fleeing Juba on foot, chased by helicopter gunships.

But this time around there is an impetus for peace, including from the elite on both sides of the conflict.

They have run out of money and need cash to continue to hold on to power. If oil flow increases and more money goes into the economy, they will find a good reason to step back from war and to enjoy the profits of peace.

The people of South Sudan are fed up with the conflict, and it will be wrong to take away any optimism they have shown about the deal. But building peace takes a lot more than signing a piece of paper.

South Sudan's ruling party declared Monday an unofficial holiday to celebrate the signing of the accord, and most businesses in Juba were shut, the BBC's Nichola Mandil reports from the city.

Its members drove around neighbourhoods, using loudspeakers to spread the news, he adds.

With a copy of the agreement in hand, Mr Kiir addressed at least 10,000 people who had gathered at the airport to welcome him back from Sudan, our reporter says.

South Sudan's President Kiir was received by a huge crowd in Juba after his return from Sudan

Speaking after the signing of the accord in Sudan, Mr Kiir said the government and rebels should "rededicate ourselves to unite our people and work for a peaceful transfer of power through the ballot boxes rather than through bullets".

Mr Machar urged mediators to focus on the implementation of the deal because the "devil lies always in the implementation".

South Sudan is rich in oil, but its economy has been devastated by the conflict.