A delegation was sent to the remote Wa region in Shan state, which borders China, said the Kyemon Daily newspaper.
The military and the United Wa State Army (UWSA) agreed to hold regular meetings and withdraw to positions they occupied before a recent stand-off.
The move came as part of a government effort to reach agreements with all the country's ethnic groups.
For decades, Burma, also known as Myanmar, has faced rebellions from several minority groups, seeking autonomy.
The UWSA is believed to be the largest, with a fighting force numbering as many as 30,000.
It reached an agreement once before with the former military regime in 1989, but recently tensions flared after the Burmese military surrounded Wa territory.
The UWSA is said to be equipped with state-of-the-art weaponry. China reportedly supplied combat helicopters to the group, a report by UK-based intelligence monitor Jane's Information Group said last May.
The Wa region was singled out by the international community for its involvement in huge drug problems in the region.
Under intense international pressure, especially from China, the UWSA banned opium cultivation in 2005.
Burma is the second largest opium grower in the world after Afghanistan, according to UN reports. Almost all of the opium it produces is grown in Shan and Kachin states.
President Thein Sein's government has embarked on a series of reforms to find a solution to the problem,
Ceasefires and political opening up mean international organisations such as the UN will have better access to areas that were previously considered no-go areas.
Burma signed ceasefire agreements with the Karen and Kachin rebel groups earlier this year.
Burma's government and rebels from the ethnic Wa guerrilla group have reached a peace deal, state media has reported.