Under the deal signed in the Tanzanian capital, the two sides agreed to a cessation of hostilities for two weeks, during which time they would negotiate a permanent ceasefire deal.
"The parties agree to stop hostilities and commit to engage in serious discussions aimed at reaching a comprehensive ceasefire within a period of two weeks," said the agreement between the government and the National Liberation Front (FNL).
During these two weeks a permanent end to hostilities will be negotiated to end the bloody civil war that has left over 300,000 dead.
After the final ceasefire agreement is signed, "members of FNL shall enjoy provisonal immunity (and) the procedure for the release of political prisoners and prisoners of war shall also start," according to a copy obtained by AFP.
"After the effective separation of the political branch and the military branch, the FNL could request to be accredited as a political party in accordance with the law," it says.
The two sides agreed to create a favourable environment for the "repatriation of refugees and return to their homes of the people who were regrouped and who were displaced."
In addition, the United Nations, African Union and regional states "shall ensure that no repatriated persons shall be targeted for prosecution" and countries that host Burundi refugees ensure that repatriations are carried out according to international law.
Leaders oversee pact
The accord was signed by FNL chief Agathon Rwasa and Burundi's Interior Minister Evariste Ndayishimiye at a ceremony attended by President Pierre Nkurunziza and South African President Thabo Mbeki who had flown in specially.
The accord, which had been delayed by a day, was hailed by international mediators in the talks, which began on May 29, and were the first direct negotiations between the FNL and the Burundi government since the 2005 elections.
Namfanelo Kota, the spokeswoman for South Africa's defence minister and chief mediator Charles Ngakula, said that the signed deal was "an agreement on a cessation of hostilities within the two weeks that both sides are negotiating a comprehensive ceasefire."
The FNL, which has between 1,500 and 3,000 fighters, is the only one of Burundi's seven Hutu rebel groups not to have signed a 2000 peace deal.
Signing postponed
The government and FNL were originally expected to reach a deal on Saturday but the signing was postponed by a day after talks snagged on the ceasefire issue.
Diplomats said a major stumbling block was the question of the Burundian army, which the FNL wanted disbanded and then reformed.
The government for its part wanted the FNL incorporated into a reformed army, which under the new constitution must be evenly split between the Hutu and Tutsi ethnic groups.
The armed forces have traditionally been dominated by the Tutsis, who form only 14 percent of Burundi's population.
Since the talks began the insurgents have carried out two attacks in
Bujumbura with mortar bombs, killing one person and injuring 14, according to the army.
Burundi's war erupted in 1993 with the assassination of the country's first democratically elected president, a Hutu, by members of the Tutsi-dominated army. More than 300,000 people have been killed.