The deal, signed by President Salva Kiir and former Vice President Riek Machar, was reached in the Sudanese capital, Khartoum, in the presence of Sudanese President Omar al-Bashir and Ugandan President Yoweri Museveni.
The latest agreement boosts hopes that peace may soon be reached to end the country’s four-and-a-half year civil war, which has killed tens of thousands, pushed millions to the brink of famine, and created Africa’s largest refugee crisis since the 1994 Rwandan genocide.
“The ceasefire will end the war in South Sudan and open a (new) page,” Machar told journalists after the signing ceremony.
The agreement calls for the opening of corridors for humanitarian aid, the release of prisoners of war and political detainees, the withdrawal of forces, and a transitional unity government to be formed within four months which will govern the country for 36 months.
It also allows members of the African Union and the East African regional bloc, Intergovernmental Authority on Development (IGAD) – that has been pushing peace efforts – to “deploy the necessary forces to supervise the agreed permanent ceasefire”.
“The agreement is a shift in position especially with President Kiir, who previously said he did not expect to work with Machar in the same government,” Ahmed Soliman, Chatham House researcher on South Sudan, told Al Jazeera.
One of the proposed points of the agreement was to have three different capitals for South Sudan to distribute power but a spokesman for Machar rejected this.
“We reject the three capitals – South Sudan is one country – and we reject foreign forces coming into our land,” opposition spokesman Garang Mabior, said.
The Khartoum negotiations began on Monday and are scheduled to last for two weeks.
Another round of negotiations are scheduled to be held in the Kenyan capital, Nairobi, and the last round of talks is expected in the Ethiopian capital, Addis Ababa.
All sides are expected to agree to terms for the forming of a transitional government during the meetings.
“During the transitional period the country shall be prepared for national elections,” according to the document signed on Wednesday.
“It is agreed that the election shall be open for all political parties and shall be free and fair,” it said.
Analysts are calling for a more comprehensive and inclusive agreement to ensure other aggrieved opposition groups are not left out.
“We have to factor in lots of other opposition groups, including the South Sudan opposition alliance who are part of the IGAD peace process and mediation, as well as groups that are outside the process and other groups who are still carrying out armed resistance,” Soliman said.
The risk of regional war motivated the mediation efforts of IGAD, which spearheaded the latest round of talks.
The provision for the African Union and IGAD to provide forces to oversee the ceasefire has not gone down well with the rebel group, and Garang said there was no guarantee the ceasefire will work.
“However, the involvement of the region is more serious now. We are cautiously optimistic,” Opposition spokerman Garang said.
Rights campaigner Beny Gideon Mabor applauds plans to monitor the ceasefire as it would strenghten the process.
It would “make it clear that sovereignity is not a barcade to do anything and expect to get away with it. The government must show responsibility to protect in line with the constitutional obligations and international law,” Mabor told Al Jazeera.
Multiple attempts at peace deals have failed in the past leaving long-suffering citizens wondering whether this latest attempt at peace would fall apart as well.
Kiir and Machar had already signed a peace agreement in August 2015, which eventually collapsed in July 2016 when fighting broke out between the two sides in the capital, Juba.
The Khartoum negotiations came after a round of talks brokered by Ethiopian Prime Minister Abiy Ahmed last week in Addis Ababa faltered.
Rights activists are confident both parties would respect the ceasefire agreement reached in Khartoum.
This will be different from previous ceasefire ever signed before. This is because warring parties were easily tempted to violate it and ran back to Khartoum and got their military to support to fight the government. With this ceasefire, there will be nowhere to run to again since Sudan government is now the peace broker
War broke out in December 2013 when Kiir accused his then-deputy Machar of plotting a coup, dashing the optimism that accompanied independence from Sudan just two years earlier.
Since then, the conflict has expanded and fighting has intensified with more than a dozen warring factions – most of them under the umbrella called South Sudan Opposition Alliance (SSOA) – who are not part of the Khartoum agreement.
Kiir’s tendency to unilaterally make unpredictable decisions has eroded trust and re-integration offers have been therefore met with suspicison by members of the opposition.
But some refugees who fled fighting are hoping this agreement stands and all grey areas resolved so they can return home.
“It brings hope to suffering citizens in and out of the country but I’m sceptical that it won’t guarantee safety as long as the issue of security arrangements remain blurred and not properly sorted out,” Dhieu William, who fled to neighbouring Uganda in 2016, told Al Jazeera.
The war has left the oil-rich country’s economy in tatters and agriculture heavily disrupted.
Seven million South Sudanese, more than half of the population, will need food aid in 2018, according to the United Nations.
During the war, oil production – which accounted for 98 percent of Juba revenues on its independence – plummeted to about 120,000 barrels a day from a peak of 350,000, according to the World Bank.
On the sidelines of the peace talks in Khartoum, Sudan and South Sudan agreed on a plan to double oil production from the south, but did not give details on how they would achieve this.
“We also reject the resumption of oil production prior to a comprehensive negotiated settlement,” Mabior said.
Khartoum and Juba agreed earlier in June to repair oil infrastructure facilities destroyed by the war within three months to boost production and said a joint force would be established to protect the oilfields from attacks by rebel forces.
Renewed conflict would be catastrophic for South Sudan’s economy with the two fighting factions facing a looming deadline to avert UN sanctions.