The deal seeks to put an end to a conflict that goes back decades
Philippine government negotiators say they have reached a deal with a Muslim rebel group to expand an autonomous region in the south of the country.
Villagers affected by the plans will be asked to vote within 12 months on whether they want to join the new area.
A larger autonomous region is something the Moro Islamic Liberation Front (MILF) has sought for decades.
The Philippine president's peace adviser said a framework agreement could be expected early next month.
"A breakthrough has been achieved in the issue of ancestral domain... tonight, with the signing of a joint communique," said Hermogenes Esperon.
The BBC correspondent in Manila, Michael Barker, says Monday's announcement is being seen as a major step forward.
Earlier this month both sides agreed to an expansion of the region, but the deal appeared in doubt as they could not agree on a timeframe.
Just last Saturday, there were reports that the Malaysian-brokered talks had collapsed.
But negotiators now say these differences have been ironed out.
The long-running Islamic insurgency in the south of the country has cost some 100,000 lives.
The MILF is the largest of several Muslim separatist groups battling the government in the predominantly Catholic country.
Formal talks between the government and MILF began in 2003, after the rebel group, which is thought to have around 11,000 members, signed a fragile truce with President Gloria Macapagal Arroyo's government.
The new agreement envisages the extension of the present autonomous region in Mindanao to include a further 712 villages.
The proposed homeland will be entitled to a large share of the resources in the area.
The new region would expand on an autonomous territory that was originally created in a deal with another Muslim rebel group, the Moro National Liberation Front (MNLF).