"I can tell you we have come to an agreement" on launching talks, having settled a dispute about the release of a hostage by the ELN, Santos said in an address in Davos, Switzerland during the World Economic Forum.
Colombia has suffered more than half a century of civil war that has killed 260,000 people, according to the authorities.
Santos has already signed a historic peace accord with the country's biggest rebel group, the leftist Revolutionary Armed Forces of Colombia (FARC).
It will demobilize and disarm the 5,700-strong FARC and transform them into a political party.
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Santos says that adding a peace deal with the smaller leftist National Liberation Army (ELN) would allow him to achieve "complete peace" in Colombia.
The ELN is estimated to have about 1,500 members.
Santos's government and ELN negotiators were on the verge of starting talks last in October in the Ecuadoran capital, Quito.
But that effort stalled due to a disagreement over the release of a lawmaker held by the ELN.