“All un-Islamic laws related to the judicial system, those against the Quran and Sunnah, would be subject to cancellation and considered null and void,” a NWFP spokesman said in a statement following the talks.
The Pakistani government has also agreed its troops will refrain from launching military operations in Swat as part of the deal.
The US, which is battling Taliban and al-Qaeda groups in the area, has previously said that such deals only serve to allow fighters to regroup.
A senior US defence department official, speaking on condition of anonymity, called the deal a “negative development”.
Tommy Vietor, a White House spokesman, said later that US officials had read the reports and were “in touch with the government of Pakistan about the ongoing situation in Swat”.
Speaking in India, Richard Holbrooke, the US special envoy to the region, did not directly address Pakistan’s move but said the rise of the Taliban in Swat underscored the point that “India, the US and Pakistan all have a common threat now”.
“I talked to people from Swat and they were frankly quite terrified … Swat has really deeply affected the people of Pakistan,” he added.
The Tahrik-e-Nafiz Shariat Muhammadi, or the Movement for the Enforcement of Islamic Law, has long demanded the implementation of sharia in the region.
Al Jazeera’s Kamal Hyder, explaining that sharia had been implemented in the region before, pointed out that the majority of people in the area were very conservative.
Residents wanted sharia because they say the justice is swifter, our correspondent said, but added that the judges would still be appointed by Pakistan’s government.
But critics expressed doubt that the deal would stop the violence in the region, pointing out that similar agreements in the past had broken down, the latest one in August, and only allowed fighters to regroup and rearm.
“It will mean that the government is ceding territory to the Taliban, which will be a repeat of what happened when prime minister Benazir Bhutto was in power in 1994”
Shuja Nawaz, analyst,
Shuja Nawaz, a strategic analyst with the South Asia Centre, told Al Jazeera that the agreement could prove problematic for Pakistan in future.
“It will mean that the government is ceding territory to the Taliban, which will be a repeat of what happened when Prime Minister Benazir Bhutto was in power in 1994 and a number of districts in Swat and Malakand were handed over to essentially the same group so they could impose their rather convoluted view of sharia on those districts.
“The moment you cede space to them, the Taliban will want to extend that control and then the government will have to go through this business of sending in the military yet again to clear and hold the territory.”
But Pakistan says that force alone cannot defeat all opposition groups and that talks must take place, although several past deals have failed.
Unlike regions under tribal rule in the northwest, where al-Qaeda and Taliban fighters have found havens to launch attacks both in Pakistan and Afghanistan, the Pakistani government has typically controlled the Swat Valley.
Conservative groups aiming to introduce sharia have been fighting government troops in the region since 2007.
The groups took control there after a 2008 peace deal collapsed within months of being signed.
Much of the violence, which has left hundreds of thousands of people homeless, has been blamed on the Taliban in Swat, headed by Mullah Fazlullah, the son-in-law of Maulana Sufi Muhammad, the leader of Tahrik-e-Nafiz Shariat Muhammadi.
Regaining control of the Swat Valley – which was formerly a popular tourist destination – is a significant test for Pakistan’s civilian leadership.
Separately on Monday, at least 15 people were killed when a suspected US drone fired two missiles at a target on Pakistan’s border region with Afghanistan.
A security official in Pakistan’s Kurram tribal region said that a building used by the Taliban was destroyed in the attack.
“Afghan Taliban were holding an important meeting there when the missiles were fired,” an intelligence official in the area said.