US President Joe Biden called the Israel-Lebanon ceasefire "good news", saying it "would take effect early on Wednesday, hours after Israeli Prime Minister Benjamin Netanyahu announced that an agreement had been approved.
The ceasefire will begin at 4:00 am local time (0200 GMT), Biden said, speaking at the White House after Netanyahu's office said his ministers had approved the deal.
Ten ministers voted in favour and one against, the Israeli premier's office said.
The United States is Israel's key ally and military backer, and Biden hailed the deal as a "new start" for Lebanon.
Netanyahu thanked Biden for his "involvement" in brokering the deal.
The United States, European Union, United Nations and G7 had all pushed for a halt in the fighting between Israel and Iran-backed Hezbollah after more than a year of violence, which has killed at least 3,823 people in Lebanon, mostly since September.
Biden and French President Emmanuel Macron said the ceasefire would protect Israel from Hezbollah and create the conditions for a "lasting calm".
The United States and France will ensure the deal is "fully implemented", a joint statement said.
In a televised address ahead of his security cabinet vote, Netanyahu said: "The length of the ceasefire depends on what happens in Lebanon."
The announcement followed the heaviest day of raids on Beirut - including a series of strikes in the city's centre - since Israel stepped up its air campaign in Lebanon in late September before troops invaded in October.
The raids continued after Netanyahu's address, with the central commercial district of Hamra coming under attack.
Hezbollah, which has yet to make an official statement on the truce, claimed responsibility for attacks on northern Israel after the agreement was announced.
The armed group has suffered staggering losses in recent weeks, including the death in an air strike of its leader Hassan Nasrallah.
Hezbollah did not participate directly in the talks for the truce, with Lebanese parliamentary speaker Nabih Berri mediating on its behalf.
Pressure for Israel to accept a deal had been steadily mounting, with G7 foreign ministers on Tuesday calling for an "immediate ceasefire".
Lebanese Prime Minister Najib Mikati, after demanding that the international community "act swiftly" to ensure the truce's implementation, said he was committed to strengthening the presence of the army in south Lebanon.
Hezbollah was the only armed group that refused to surrender its weapons after the 1975-1990 Lebanese civil war ended.
To date, the armed group has maintained a stronger presence in south Lebanon than the national army has.
Biden said the ceasefire deal was designed to be a "permanent cessation of hostilities" between Israel and Hezbollah.
Under the agreement, the Lebanese army would take control of the border area on their side and "what is left of Hezbollah and other terrorist organisations will not be allowed to threaten the security of Israel again", he said.
The United States and France would ensure the deal was fully implemented, he added.
Netanyahu said in his speech that Israel would maintain "full" freedom to act, even after the ceasefire.
He said a truce would permit Israel to redirect its efforts back to Gaza, where a military onslaught has killed more than 44,000 Palestinians and has devastated the territory.
"When Hezbollah is out of the picture, Hamas is left alone in the fight. Our pressure on it will intensify," he said.
The agreement would also enable "focusing on the Iranian threat" and give Israel's military time to resupply, he said.
Iran is the main backer of both Hezbollah and Hamas, as well as other regional proxies that have attacked Israel over the past year in solidarity with Palestinians in Gaza.
Iran itself has fired two barrages of missiles and drones at Israel since the Gaza war began, most of which were intercepted by Israel or its allies.
A ceasefire has faced some opposition from within Netanyahu's own coalition, with far-right National Security Minister Itamar Ben-Gvir saying it would be a "historic missed opportunity to eradicate Hezbollah".
The results of a poll by Israel's Channel 12 showed that based on their understanding of the ceasefire proposal, 37 percent of Israelis support the deal, 32 percent oppose it and 31 percent said they were unsure.
Netanyahu's announcement followed a flurry of strikes on central Beirut as well as in the southern suburbs.
Lebanon's state-run National News Agency reported that three strikes hit the central Nweiri neighbourhood and destroyed a "four-storey building housing displaced people".
The health ministry said the first strike killed seven people and wounded 37.
"We were blown away and the walls fell on top of us," said Rola Jaafar, who lives in the building opposite.
The NNA said Israeli strikes had created "a belt of fire" Tuesday around Beirut's southern suburbs.
The Israeli military said it had attacked Hezbollah targets in Beirut, including "components of Hezbollah's financial system", as well as many others in south Lebanon.
Its troops had also "engaged in close-quarters combat with terrorists" and destroyed hidden weapons caches during raids in the Litani River region near the border.
Sustained efforts this year by mediators to secure a truce and hostage-release deal in the Gaza war have failed.
But US Secretary of State Antony Blinken suggested that a Lebanon ceasefire could change that, telling reporters that "by de-escalating tensions in the region, it can also help us to end the conflict in Gaza".
Israel's military campaign has killed 44,249 people in Gaza. Its atrocities in the Palestinian territory have been decried on the international stage, with many labelling them as 'war crimes' and 'genocide'.