Ethiopian Tuesday announced a planned withdrawal from Badme, whose ownership caused a bloody war with neighbouring Eritrea, sources said.
The decision was made at the executive council meeting of the ruling party Ethiopian People Revolutionary Democratic Front (EPRDF) which started on Tuesday in Addis Ababa.
Badme is a small rural area that became a flashpoint culminating in a border war in 1998.
EPRDF, which controls parliament 100 per cent, agreed to implement the Algiers agreement signed in 2000 after the end of two years border war, that claimed estimated over 70,000 lives.
More than 150,000 soldiers have been deployed for the last 18 years across the border between Ethiopia and Eritrea.
Ethiopian had, for the last 18 years, refused to implement the Algiers agreement after the international court awarded the disputed Badme to Eritrea.
EPRDF also extended the peace and normalisation of relations call to the Eritrean government.