Ethiopia and Eritrea have declared their "state of war" over after landmark talks between the neighbouring countries' leaders, as part of a historic agreement that will see the opening of embassies, development of ports and resumption of flights.
The sudden rapprochement ends a decades-long cold war over border disputes that hurt both countries.
Eritrean Information Minister Yemane Gebremeskel, quoting from a "Joint Declaration of Peace and Friendship," said on Monday that "a new era of peace and friendship has been ushered (in)".
The "state of war that existed between the two countries has come to an end", he wrote on Twitter.
"Both countries will work to promote close cooperation in political, economic, social, cultural and security areas," Yemane added.
The agreement was signed by Eritrean President Isaias Afwerki and Ethiopian Prime Minister Abiy Ahmed on Monday morning at state house in Asmara, the capital of Eritrea.
"The people of our region are joined in common purpose," Abiy said on Monday, after signing the landmark declaration.
Ethiopia's state broadcaster said the two men had "agreed to participate in the development of ports" - potentially a huge economic boost for both countries, particularly landlocked Ethiopia which has one of Africa's fastest growing economies.
The deal would also include a resumption of phone connections, Ethiopia's foreign ministry said.
Abiy arrived in Asmara on Sunday, where he was welcomed at the airport by Isaias. The two men shared a "brotherly embrace" at the airport runway before being cheered on by thousands of Eritreans who took to the streets to greet them.
At a dinner hosted by Isaias late on Sunday, Abiy said diplomatic, trade, transport and communications ties would be re-established and borders re-opened.
"We agreed that the airlines will start operating, the ports will be accessible, people can move between the two countries and the embassies will be opened," Abiy said.
"We will demolish the wall and, with love, build a bridge between the two countries," he said.
Abiy left Asmara after signing the joint agreement on Monday.
The visit comes a month after Abiy surprised people by fully accepting a peace deal that ended a two-year border war between the two countries.
Last month's decision to fully accept the deal was the biggest and most surprising reform yet announced by Ethiopia's prime minister, who took office in April and quickly set off a wave of reforms, freeing journalists and opposition figures from prison, opening up the state-run economy and unblocking hundreds of websites after years of anti-government protests demanding more freedoms.
A high-level Eritrean delegation led by Foreign Minister Osman Saleh had earlier visited the Ethiopian capital, Addis Ababa, last month for peace talks.
The Horn of Africa nations remained at loggerheads since Ethiopia rejected a United Nations ruling and refused to cede to Eritrea land along the countries' border following a 1998-2000 war that killed 80,000 people.