Russia has signed a border treaty with Estonia 14 years after the Baltic state gained independence from Soviet rule.
Russia's Sergei Lavrov says there is still a dispute with Latvia
Russian Foreign Minister Sergei Lavrov and his Estonian counterpart Urmas Paet met in Moscow to sign the treaty, which fixes land and sea borders.
Negotiations have taken nearly a decade to complete, with Russia widely seen as stalling in order to frustrate Estonian efforts to join the European Union.
Estonia was one of 10 countries to join the EU in May last year.
BBC Baltic states correspondent Steven Paulikas says that since Estonia joined the EU, the 300km border has taken on greater significance.
It now marks the beginning of the EU's common economic space, with implications for international trade. Estonia is also soon to join the Schengen zone of free travel in Europe, and anyone entering the country from Russia would be able to continue unchecked to most EU member states.
Both Moscow and Brussels have been concerned that such a crucial border has until now existed only in theory.
The agreed border draws the border line the way it existed between Russia and Estonia when they were both republics of the Soviet Union.
Estonia has had to give up 5% of its pre-World War II territory. Our correspondent says this has angered many nationalists and ethnic Estonians left on the Russian side of the new border.
Russia has failed to reach a deal with another Baltic neighbour, Latvia, because of Latvian demands that the border be set according to a treaty signed in 1920.
"Before the treaty was signed, our Estonian colleagues assured us that they were not making any unilateral interpretations of the essence of the treaty, ie the line of the border - in contrast, as you know, to our Latvian neighbours," said Mr Lavrov.
Five decades of almost unbroken Soviet occupation of the Baltic states of Estonia, Latvia and Lithuania ended in 1991.
Estonia and Lithuania boycotted ceremonies marking 60 years since the end of World War II, saying their liberation from the Nazis marked the start of Soviet occupation.
Both Russia's and Estonia's parliaments must ratify the border agreement before it comes into effect.