Reports say the deal was signed today in Miran Shah, the main town in Pakistan's troubled North Waziristan region.
The accord calls for local residents to not give shelter to foreign militants and end cross-border attacks on coalition forces deployed in Afghanistan. It also urges militants to stop targeting Pakistani officials, as well as pro-government tribal elders, and journalists.
In return, Islamabad has pledged to reduce the number of government troops stationed in the area and end ground and aerial operations in North Waziristan.
The deal is the first of its kind since Pakistani troops went after militants on the Afghan border five years ago.
Afghan officials have long blamed Pakistani authorities for doing too little to combat cross-border attacks aimed at undermining the government in Kabul.
Pakistani President Pervez Musharraf is expected to visit the Afghan capital on September 6.