Holding banners which read "Blessed are the Peacemakers", anti-government Sudanese held a peace demonstration at the rebel-held town Roumbaik on Tuesday.
Southern separatist leader John Garang flew into town after signing the deal at talks in Kenya.
The security deal provides for two separate armies with the creation of integrated units comprising government and SPLA troops during a six-year transition period, at the end of which southerners will have the right to a referendum on secession.
Hopes are high the deal will bring significant change. One demonstrator said she expected it would improve the quality of life in the south.
The accord clinched on Thursday by Sudan's government and Garang's Sudan People's Liberation Army (SPLA) clears a big stumbling block in talks aimed at ending a conflict that has killed about two million people.
Crowds of women and bare-chested men welcomed Garang by singing and dancing.
"When we heard about the signing of the peace deal we felt really impressed and happy," Makuer Munyanyong told local journalists in his native Dinka language. "We are here now to celebrate."
Garang: This is a major step
In a gesture symbolising a return to peace, the bearded Garang walked over the carcasses of 10 slaughtered cows.
"We feel very happy. The population is happy for the agreement which we reached," Garang told reporters. "This is a major achievement and a major step towards peace but there are still many issues to be resolved."
End of war
Peace has eluded Sudan despite years of efforts to end the civil war, which broke out in 1983, pitting the government in the north against rebels seeking greater autonomy in the mainly animist and Christian south.
Accompanied by fighters, Garang went to pay his respects at Roumbaik's Freedom Square Stadium, named in honour of 5000 SPLA soldiers killed in 1997 when the rebels captured the town.
"We welcome the news because we in SPLA were saying that we have to bring peace to save lives," Salda Mathok Geng, SPLA's director of military administration, told a crowd at the stadium.
Peace talks are due to resume at committee level on 6 October to discuss unresolved issues such as power and wealth sharing.