The agreement was brokered by Argentina, Brazil, Chile and the United States, who stepped in after three years of negotiations between Ecuador and Peru reached an impasse.

Ecuadorian President Jamil Mahuad and Peruvian President Alberto Fujimori will sign the agreement on Monday at a ceremony in Brazil's capital, Brasilia.

President Fujimori shows disputed border

"Starting Monday, we are going to have peace in both countries - hopefully forever," said Mr Mahaud.

President Fujimori also expressed relief that the decades-old dispute that has brought the two countries to war three times was finally over.

"This is one huge problem out of the way. Both countries are winners because both have achieved peace," he said.

1942 boundary

The treaty establishes the frontier between Ecuador and Peru along the summit of the Condor mountains, where the two countries fought a brief war in 1995.

This agreement ratifies an earlier decision reached by the same countries in 1942, and confirms Peru's historical claims.

The four countries have also agreed to give Ecuador a small patch of land within Peruvian territory.

The area, called Tiwinzta, will remain under Peruvian sovereignty, but be occupied by Ecuador.

Tiwintza is a highly emotional symbol to Ecuador because its troops defended it successfully against assaults by Peruvian troops during their last border war in 1995.

The peace agreement also calls for the creation of demilitarised, ecological reserves on either side of the disputed 50-mile (80km) border.

The US State Department praised the two presidents as "an example to the rest of the hemisphere - and in fact the rest of the world - of statesmanship and dedication shown by many hours of personal engagement in these negotiations".