"Since the other side (Taliban) has shown intent to negotiate, we also wish to give peace yet another chance," Sharif said in the National Assembly.
He, however, made it clear that "terror attacks should be stopped. Terror and talks cannot go hand in hand together."
Stating that all arms of government are on the same page, Sharif declared that his government had taken all parties on board to curb terrorism.
He announced the setting up of a four-member committee to oversee peace talks, with Irfan Siddiqui, Rahimullah Yusufzai, Rustam Shah Mehmand and Major Amir as its members.
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Sharif said that Interior Minister Chaudhry Nisar Ali Khan will coordinate the working of the committee.
He said the previous experience of talks was "bitter".
"We invited them to talks so that they could not play with civilian life and property. So that they follow the constitution. Unfortunately, they did not heed our plea and continued to target security forces and civilians."
Sharif's announcement puts to rest speculation that the military would launch an offensive against the Taliban following a wave of bloody attacks.
"Peace is not a choice but is our destination. Peace would be established at any cost," he said, adding, the government is responsible for providing security to the masses.
"People and institutions of Pakistan are being targeted by the terrorists. Islam condemns killing of innocent persons. Islam has nothing to do with terrorism. Islam values human life without discrimination of religion or creed. Government's top priority is to curb terrorism," he said.