Eritrea agreed to withdraw its forces from the Tigray region, Ethiopian Prime Minister Abiy Ahmed said.
"In our March 26, 2021 discussions with [Eritrean] President Isaias Afwerki during my visit to Asmara, the government of Eritrea agreed to withdraw its forces out of the Ethiopian border," Mr Abiy saidon Twitter.
Friday's statement comes after intense pressure from the United States and others to address the crisis in Tigray, where witnesses described Eritrean soldiers looting, killing and raping.
Mr Abiy’s statement, which came after visiting the Eritrean capital to meet Mr Afwerki, said Ethiopian forces will take over guarding the border areas “effective immediately”.
Only in the past week has he acknowledged the presence of soldiers from Eritrea, long an enemy of the Tigray leaders who once dominated Ethiopia’s government.
Eritrea is yet to comment on the matter.
The prime minister called for a return to "good neighbourliness" and a continuation of bilateral relations formed three years ago.
He shocked the region in 2018 by making peace with Eritrea after a long border war in the Tigray region, an achievement for which he was awarded the Nobel Peace Prize.
But since the present Tigray conflict began in November, Mr Abiy has been accused of teaming up with Eritrea to pursue the now-fugitive Tigray leaders.
The new statement does not say how many Eritrean soldiers were in Ethiopia, although witnesses estimated the number to be well in the thousands.