In a statement on Friday, the Nigerian president's office said an agreement to cease all hostilities had been reached.
"The groups affirm commitment to the peace offer by the president, promise to cease all hostilities against themselves and all economic and social interests of the Nigerian state," the statement said.
The rebels earlier this week had threatened to go to war if their demands for a bigger slice of Nigeria's oil wealth, greater autonomy for the local Ijaw people and a national debate on the country's problems were not met.
They had warned foreigners and multinational oil companies to quit the region by 1 October.
Mujahid Dokubo Asari, leader of the People's Volunteer Force, began talks on Wednesday with officials from President Olusegun Obasanjo's government.
The Niger Delta accounts for
most of Nigeria's oil output
Asari, and Ateke Tom, leader of the rival Niger Delta Vigilante group, both signed the ceasefire deal, in which they promised "the disbandment of all militias and militant groups as well as total disarmament".
Asari described the deal as a victory for the people.
"It is the first time that the president and the government of Nigeria recognised that nationalities in Nigeria have the right to ask for resources control and self-determination. It is a giant step forward," he said.
Fighting between the army and the rebels had intensified with about 500 people dying in the unrest in recent weeks.
The clashes together with other factors sent global oil prices soaring to $50 dollar a barrel earlier this week.
The Niger Delta accounts for the bulk of Nigeria's oil output of 2.3 million barrels per day. Nigeria is the world's seventh largest oil exporter and has earned more than $360 billion since oil was discovered in 1957.