The deal, signed on Saturday, paves the way for a transitional government, and eventually elections, following the overthrow of long-time leader Omar al-Bashir.
People of all ages took to the streets of the capital in celebration, with many heading toward the newly renamed Freedom Square, once the site of many of Bashir’s rallies.
Stability in Sudan, which has been grappling with an economic crisis, is seen as crucial for a volatile region struggling with conflict and insurgencies from the Horn of Africa to Egypt and Libya.
The Transitional Military Council (TMC) has ruled Sudan since April, when the military deposed Bashir following months of protests against his rule during which dozens of demonstrators were killed.
The TMC and the main opposition alliance, the Forces of Freedom and Change (FFC), have been negotiating the power-sharing deal since then, but continued unrest, during which more protesters were killed, delayed an agreement.