The agreement on normalisation, signed in Kuala Lumpur on Saturday, calls for Muslim self-rule in parts of the southern Philippines in exchange for a deactivation of rebel forces by the Moro Islamic Liberation Front (MILF).
Under the agreement, the guerrillas would turn over their firearms to a third party, which would be selected by the rebels and the Philippine government.
In return, a regional police force would be established in the new Muslim autonomous area. It would be created in 2016. At the same time, the Philippine military would reduce the presence of troops and help disband private armies in the area.
"The issue of normalisation is the most sensitive and, as far as I know, it entails a lot of sacrifices on the part of the MILF because, to achieve real peace, we have to commit to decommission our forces and put them beyond use," MILF chief negotiator Mohagher Iqbal said.
It was the last of four annexes agreed by the rebel group and the Philippine government since the two parties signed a preliminary peace plan in October 2012.
The two sides previously signed agreements on transition methods, wealth sharing and power sharing.
Presidential spokesman Edwin Lacierda said a comprehensive peace agreement, which will incorporate the framework agreement and the four annexes, would be signed in Manila in the near future.
"We hope this will give us the just and lasting peace that our brothers and sisters in the southern Philippines have been hoping for," he said.
The comprehensive agreement would pave the way for the creation of the new Muslim autonomous entity called "Bangsamoro" under a law to be approved by Congress. The government aims to set up the region by 2016.
The new entity will have substantive control over natural resources and wealth and revenues generated in the southern region of Mindanao.
The peace talks between the MILF and the Philippine government have been brokered by Malaysia since 1997.