The leaders of Ethiopia and Eritrea have signed a declaration saying that the state of war between the two countries is over, BBC reports.
A peace deal ending the 1998-1999 border conflict has never been fully implemented and there has been tension between the neighbours ever since.
The countries have also agreed to re-establish trade and diplomatic ties.
The declaration came at a landmark meeting between the two countries’ leaders in Eritrea’s capital, Asmara.
The summit between Eritrea’s President Isaias Afewerki and Ethiopia’s Prime Minister Abiy Ahmed marked the first time the neighbours’ heads of state had met for nearly two decades.
The two countries have been in a state of “no war, no peace” since 2000, when a peace deal ended a war in which tens of thousands of people were killed.
A border commission set up under the peace agreement ruled that the town of Badme, the flashpoint for the conflict, was part of Eritrea but Ethiopia refused to accept this and so normal relations were never resumed