Before now, a peace deal that ended the 1998-1999 border war between the two countries has never been fully implemented and there has been tension between the neighbours ever since.
The declaration came at a landmark meeting between the two countries' leaders in Eritrea's capital, Asmara. The meeting between Eritrea's President Isaias Afewerki and Ethiopia's Prime Minister Abiy Ahmed was the first between the neighbours' heads of state for nearly two decades.
On Monday, the leaders agreed that "a new era of peace & friendship has been ushered [in]", Eritrea's Information Minister Yemane Gebre Meskel said on Twitter.
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