Georgetown: The Presidents of Colombia and Ecuador said they had agreed to fully re-establish ties broken off more than two years ago, at a South American summit in Guyana.
"We`ve decided to fully re-establish our relations. I celebrate this very important step for our peoples," said Colombian President Juan Manuel Santos, at the one-day Union of South American Nations (Unasur) summit.
"I have to recognise the transparency and goodwill of Santos for responding to sensitive issues presented by Ecuador. We`ve started to move in the right direction," Ecuadorean leader Rafael Correa told journalists.
Ambassadors were set to return to their posts before Christmas, they said.
Quito broke off ties after Colombia bombed a camp of Colombian FARC leftist rebels in Ecuador on March 01, 2008, which left 25 dead, including Raul Reyes, second-in-command of the rebel group.
According to Santos, Colombia has now given information to Ecuador on the bombing. As former defence minister, Santos had ordered the attack.
Santos has since sought to improve ties with Ecuador and has also moved to improve previously tense relations with neighbour Venezuela since taking over Colombia`s presidency.
Venezuelan President Hugo Chavez, Argentina`s Cristina Fernandez and Brazil`s Luiz Inacio Lula da Silva also attended the Unasur summit.
Officials first honoured Fernandez`s late husband, former Argentine President Nestor Kirchner, who died last month.