The deal agreed in Ethiopia comes after fighting in two border areas, Abyei and South Kordofan, which has forced some 170,000 people from their homes.
When the troops pull out, they are to leave a 20km (12-mile) buffer zone along the border.
The fighting had raised fears that the 21-year north-south war could resume.
This agreement, brokered by former South African President Thabo Mbeki, follows separate deals to end the fighting in Abyei and South Kordofan.
It is to be monitored by international observers and UN peacekeepers.
Abyei is claimed by both sides, while the fighting in South Kordofan pits northern forces against mostly ethnic Nubans who fought for the southern rebels during the civil war but now find themselves in the north.
The BBC's Peter Martell in the southern capital, Juba, says the agreement is not as easy to implement as it sounds, as parts of the border are still contested and it has not been demarcated.
He says the deal will come as a relief to many in Juba but people will be keen to make sure it is implemented.
On Tuesday, it was agreed that the former southern fighters in South Kordofan would either be integrated into the northern army or disarmed.
The agreement, mediated by the African Union, also covers the neighbouring Blue Nile state, which has many former southern fighters but which has been relatively peaceful.
The document stresses that any disarmament will be conducted without force.
Earlier this week, the UN Security Council endorsed the deployment of 4,200 Ethiopian troops to keep the peace in Abyei after a previous deal to make it a demilitarised zone.
The two sides are still to agree on how to divide Sudan's oil wealth after independence.
Some 75% of the oil fields lie in the south but the pipelines flow north to the Red Sea port of Port Sudan.
At present, the revenues are supposed to be shared equally.
Show regionsThe great divide across Sudan is visible even from space, as this Nasa satellite image shows. The northern states are a blanket of desert, broken only by the fertile Nile corridor. Southern Sudan is covered by green swathes of grassland, swamps and tropical forest.
Sudan's arid northern regions are home mainly to Arabic-speaking Muslims. But in Southern Sudan there is no dominant culture. The Dinkas and the Nuers are the largest of more than 200 ethnic groups, each with its own traditional beliefs and languages.
The health inequalities in Sudan are illustrated by infant mortality rates. In Southern Sudan, one in 10 children die before their first birthday. Whereas in the more developed northern states, such as Gezira and White Nile, half of those children would be expected to survive.
The gulf in water resources between north and south is stark. In Khartoum, River Nile, and Gezira states, two-thirds of people have access to piped drinking water and pit latrines. In the south, boreholes and unprotected wells are the main drinking sources. More than 80% of southerners have no toilet facilities whatsoever.
Throughout Sudan, access to primary school education is strongly linked to household earnings. In the poorest parts of the south, less than 1% of children finish primary school. Whereas in the wealthier north, up to 50% of children complete primary level education.
Conflict and poverty are the main causes of food insecurity in Sudan. The residents of war-affected Darfur and Southern Sudan are still greatly dependent on food aid. Far more than in northern states, which tend to be wealthier, more urbanised and less reliant on agriculture.
Sudan exports billions of dollars of oil per year. Southern states produce more than 80% of it, but receive only 50% of the revenue, exacerbating tensions with the north. The oil-producing region of Abyei was due to hold a separate vote on whether to join the north or the south, but it has been postponed indefinitely.
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