Negotiations between the government and the Moro Islamic Liberation Front, MILF, have been ongoing for 15 years, with the rebel group demanding an independent Islamic state.
President Benigno Aquino III described the compromise as a "framework agreement" for establishing the autonomous region governed by Muslims, CNN reported Sunday. The region will be named Bangsamoro.
"This framework agreement paves the way for a final, enduring peace in Mindanao," Aquino said. "It brings all former secessionist groups into the fold; no longer does the Moro Islamic Liberation Front aspire for a separate state."
The agreement marks a tentative end to rampant attacks in the region by the rebels and military offenses that have killed tens of thousands of people, CNN reported.
Bangsamoro will become official by 2016 when Aquino's term ends.