President Ndayizeye, a Hutu, took office under an earlier deal

The deal was signed in the early hours of the morning after negotiations mediated personally by South African President Thabo Mbeki in Pretoria.

Rebel leader Pierre Nkurunziza called for an immediate halt to hostilities, saying his FDD combatants would no longer fight against the people of Burundi.

A ceasefire signed last December has failed to end the bitter war, pitting ethnic Hutu rebels against an army dominated by the Tutsi minority.

Burundi negotiators are used to lying to each other Pasteur Habimana FNL rebels

This agreement spells out the details of how the army would be restructured - a key rebel demand.

However, the BBC's East Africa correspondent Ishbel Matheson says the civil war will continue to sputter on as the second smaller rebel group, the FNL, has so far refused to take part in peace negotiations.

Climbdown

Mr Ndayizeye, a Hutu, became president in April under the terms of an earlier power-sharing agreement, which is supposed to lead to elections next year.

Under the agreement, the rebels will now take up 40% of officers' posts in the army.

FDD GAINS 4 ministers 40% of army officers 15 MPs Second assembly vice-president Assembly deputy secretary general 2 ambassadors 35% of a new police force 35% of vacant secret service posts FDD fighters to be demobilised

Politically they will be given four ministerial positions, and the vice-presidency of the country's national assembly.

Our correspondent says the deal represents something of a climbdown for the rebels as it is certainly a lot less than they were demanding at peace talks in Tanzania only a few weeks ago.

On the face of it, it is a breakthrough, but much will depend on whether the agreement is implemented on the ground, our correspondent says.

But the FNL immediately dismissed the deal.

"Burundi negotiators are used to lying to each other," FNL spokesman Pasteur Habimana told Reuters news agency in Burundi's capital, Bujumbura.