The agreement states that both countries will return to the agreement signed on July 28 and to all subsequent attempts to reach a ceasefire.
The ceasefire will come into effect at 12:00 noon on December 27, local time.
According to the agreement, the countries must allow residents of the border region to return to their homes as soon as possible "in a safe and dignified manner."
The unrest has been ongoing since May and ceasefires have been agreed twice since then, without holding. The most recent was in October, when Donald Trump led the signing ceremony on site at the ASEAN summit in the Malaysian capital Kuala Lumpur.
Despite the US president's efforts, fighting resumed in November. At least 47 people have been killed and over a million have been forced to flee their homes in recent weeks of fighting.
UN Secretary-General António Guterres welcomes the latest ceasefire agreement. It is a positive step towards “alleviating civilian suffering, ending current hostilities and creating an environment conducive to achieving lasting peace,” Guterres said through his spokesperson, Stephane Dujarric.
