Ethiopia's government has signed an agreement to end hostilities with a rebel group that it had, up until June, labelled a terrorist organisation, Reuters news agency quotes Ethiopian state television as saying.

The Oromo Liberation Front had long disputed the terrorist label, saying it was fighting for the rights of the Oromo people against domination by the Tigray minority.

The accord is a clear break with the previous government of Prime Minister Hailemariam Desalegn, which designated the OLF a terrorist organisation in 2014.

It is seen as the latest in a series of reforms by current Prime Minister Abiy Ahmed, who came to office in April.