Nepal's governing parties and Maoist rebels clinched a historic peace deal on Wednesday that will see the movement join an interim administration and end their bloody 10-year insurgency.
Negotiators said a new interim government would be formed by December 1 and that both the army and the rebels would give up some weapons.
A new constitution will be drafted and the role enjoyed by the monarchy -- one of the biggest sticking-points of the six-month peace process in the impoverished Himalayan nation -- will be reviewed.
The breakthrough "has opened the doors to build a new Nepal," a government negotiator, Ram Chandra Poudel, told reporters after marathon 16-hour talks ended in the early hours of the morning.
Rebel spokesman Krishna Bahadur Mahara called the deal "one of the biggest breakthroughs in the history of Nepali politics."
The civil war between the Maoists and central government has claimed at least 12,500 lives since 1996.
"Now we will come forward not as a rebel force, but as a political force," Mahara told AFP. "The party will move forward with a new strategy and build a new image."
"Our party sees this as an historic agreement," said Ananta, the deputy commander of the Maoist People's Liberation Army. "With this agreement Nepal has entered into a new era."
Hridayesh Tripathi, Nepal's minister of commerce, said parliament would be dissolved and a transitional assembly formed by November 26.
Under the deal, the Nepali Congress party, the country's largest, would get 75 of the 330 seats in the new parliament.
The Communist Party of Nepal (Unified Marxist-Leninist), the second largest party, and the rebels would each have 73 seats, Home Minister Krishna Prasad Sitaula told journalists.
The remaining seats would be divided between the five other parties in the current ruling multi-party government.
Sitaula also said that the rebel army, which controls large swathes of the countryside, had agreed to be confined in camps under UN supervision before the end of November. Disarmament had been a key hurdle in the protracted peace process.
"The weapons of the Maoists will be locked up and a similar amount of Nepal Army weapons will also be locked up," he added.
This was the third time the two sides had tried to hammer out a peace deal. Two previous attempts, in 2001 and in 2003, both failed, plunging the country back into conflict.
However, the peace process won fresh impetus when a multi-party government came to power in April this year after mass protests forced King Gyanendra to end direct rule. In May the two sides declared a cease-fire and in subsequent talks agreed to hold elections to a constituent assembly to rewrite the constitution, meeting a key rebel demand, and to form an interim parliament including the Maoists.
The rebels' parallel government structures will be dissolved once a transitional constitution comes into effect on November 26, said Sitaula, the home minister.
Poudel, the government negotiator from the Nepali Congress party, said the fate of the monarchy would be decided at a first meeting after the constituent assembly elections.
But analysts have warned that plenty of work is required for the deal to stick.
"It cannot automatically lead to perpetual peace and tranquillity," Kapil Shrestha, political science professor at the Tribhuvan University, told AFP.
"We still have a lot more to do to address the core issues of conflict like human rights violations, abductions, displacement and facilitating social transformation," he said.
A Western diplomat was also cautious.
"Implementation is the key. Not surprisingly arms management is one of the main weaknesses in the agreement because its such a complicated issue," the diplomat said.
"What will happen to the militia? What sanctions will there be if the agreement is broken? Can the UN really monitor all the weapons?"