Northern Ireland's arch-rival leaders Ian Paisley and Gerry Adams have agreed a power-sharing deal at historic talks.
Historic day: The two leaders sat side by side
The two men agreed to form a joint executive on 8 May to run the province. Their first ever direct talks were held at Stormont, the province's parliament.
Mr Paisley, leader of the Protestant DUP, and Mr Adams of the mainly Catholic Sinn Fein, have been implacable opponents for decades.
The DUP wants to keep British rule. Sinn Fein calls for a united Ireland.
Mr Paisley is expected to be first minister in the new administration, while Martin McGuinness of Sinn Fein - the political wing of the IRA - would be deputy first minister.
Mr Paisley said the DUP was committed to full participation in government and Mr Adams said it was a "new era".
UK Prime Minister Tony Blair said it was a very important day for the people of Northern Ireland.
The British and Irish governments had said they would shut the assembly if an executive was not agreed on Monday.
Gerry Adams met DUP leader Ian Paisley
However, Northern Ireland Secretary Peter Hain later said that deadline might be allowed "to slip" for a few weeks if the parties agreed to work together.
Mr Adams - wearing his Easter lily to commemorate those who died in the 1916 Irish rebellion - and Mr Paisley were seated at one corner of a table at Stormont.
The Northern Ireland assembly was suspended in October 2002, amid allegations of an IRA spy ring at Stormont.
A subsequent court case collapsed. Direct rule has been in place since that date.
In the assembly election earlier this month, the DUP and Sinn Fein emerged as the two largest parties.
After Monday's meeting, Mr Paisley said: "Our goal has been to see devolution returned in a context where it can make a real, meaningful improvement in the lives of all the people of this part of the United Kingdom.
"On Saturday, the DUP executive overwhelmingly endorsed a motion committing our party to support and participate fully in government in May of this year - this is a binding resolution."
Mr Adams said he welcomed Mr Paisley's statement.
"I believe the agreement reached between Sinn Fein and the DUP - including the unequivocal commitment made by their party executive and reiterated today - to the restoration of political institutions on 8 May marks the beginning of a new era of politics on this island," he said.
"The basis of the agreement between Sinn Fein and the DUP follows Ian Paisley's unequivocal and welcome commitment to support and participate fully in the political institutions on 8 May."
Mr Blair said it was "a very important day for the people of Northern Ireland, but also for the people and the history of these islands".
"Everything we have done over the last 10 years has been a preparation for this moment."
Irish Prime Minister Bertie Ahern said this had "the potential to transform the future of this island".
"This morning saw unprecedented and very positive developments in Northern Ireland."
An order signed by the Northern Ireland secretary restarted devolution at midnight.
UK Chancellor Gordon Brown promised an extra £1bn if devolution was back on Monday, on top of £35bn pledged by the government over four years.
The power-sharing executive will have four DUP ministers, three Sinn Fein, two from the Ulster Unionist Party and one from the Social Democratic and Labour Party.