Separatists in southern Yemen have given up on the self-rule they declared in April.
The separatists, the Southern Transitional Council (STC), agreed the move in an accord with the internationally recognised government.
The accord gives the STC representation in a new Yemeni government to be formed within 30 days.
It could also heal a rift in the Saudi-led coalition backing the government against Houthi rebels in the north.
The accord builds on a ceasefire between the separatists and government signed in June.
The southern separatist issue has strained the Saudi-led anti-Houthi alliance. The STC is backed by the United Arab Emirates, which is also part of Saudi Arabia’s coalition.
The United Nations has meanwhile warned that time is running out for any possible deal on ending the larger conflict between the Houthis and the Saudi-led coalition, which has left thousands dead and displaced millions. The UN has been trying to get the warring parties to start peace talks.
“There is a real risk that these negotiations will slip away,” the Yemen envoy, Martin Griffiths, told the Security Council on Tuesday.
Severe food shortages caused by the conflict are worsening the impact of the coronavirus.
The Saudi-led coalition and the internationally-recognised government have been at war with the Houthis since 2014. Yemen’s President Abedrabbo Mansour Hadi lives in exile in Riyadh.