The deal, which follows three days of negotiations, was aimed at laying the "foundation for political dialogue" and working towards ending the conflict in Kachin that broke out two years ago when a 17-year ceasefire crumbled.
"We're working not just towards a just and sustainable peace but towards a new political culture, one built on compromise, mutual respect and understanding," said Aung Min, the minister leading the government's peace efforts, in a statement.
Fighting in Kachin near the northern border with China has continued since June 2011 and displaced some 100,000 people according to the United Nations.
The bloodshed -- along with religious unrest elsewhere in the country -- has overshadowed widely praised political changes as Myanmar emerges from decades of military rule.
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President Thein Sein's reformist government has reached tentative peace deals with most major ethnic minority rebel groups in the country, which has been racked by civil wars since independence from Britain in 1948.
In his visit to London in July, Thein Sein expressed hope that "the guns will go silent everywhere in Myanmar for the very first time in over 60 years".
Myanmar has more than 130 official ethnic minorites and over a dozen major armed rebel groups, which have campaigned for greater autonomy.
The latest deal with the Kachin Independence Organisation (KIO) and its armed wing, which built on a previous deal in May, includes provisions to "work to end all armed fighting" and form a plan to resettle those displaced by the violence.
The country's quasi-civilian regime released some 56 political prisoners on Tuesday to coincide with the start of negotiations, with activists saying many of those freed were linked to the Kachin rebels.
Myanmar released some 70 political prisoners in July, many of whom were also from Kachin groups.