The world's highest mountain lies on the border between the two countries and they have disagreed for years over its exact height.
Nepal measures the mountain at 8,848 metres - insisting it is nearly four metres taller than China's measurements claim.
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Officials from the two neighbours have reached a compromise at talks in Kathmandu - agreeing that the two measurements refer to different things - one to the height of Everest's rock and the other to the height of its snowcap.
"The Chinese side - led by Li Qingyuan - accepted Nepal's claim that the snow height of Mount Everest is 8,848 metres," a senior official at Nepal's Department of Surveys told the Kathmandu Post.
Mountain 'growing' say geologists
"While the Nepali side recognised the Chinese claim that the rock height of the mountain is 8,844.43 metres," he told the paper.
Thousands of people have climbed Mount Everest since the first ascent in 1953 by Sherpa Tenzing Norgay and Edmund Hillary, but its exact height has been a source of dispute ever since the first measurement was made in 1856.
The broadly accepted height of 8,848 metres was first determined by an Indian survey in 1955, and measured the mountain's snow cap, rather than the rock beneath it.
Geologists believe Everest is growing as India is gradually pushed beneath China and Nepal by the shifting of the continental plates.
In May 1999 an American expedition used GPS technology to measure a height of 8,850 metres and this figure is now used by the US National Geographic Society, although it has not been officially accepted by Nepal.
