Landlocked Ethiopia signed an initial agreement with Somalia's breakaway region of Somaliland on Monday to use its Red Sea port of Berbera, Prime Minister Abiy Ahmed's office said.
The Horn of Africa country currently relies on neighbouring Djibouti for most of its maritime trade.
"This has been now agreed with our Somaliland brothers and an MoU (Memorandum of Understanding) has been signed today," Abiy said at the signing ceremony with Somaliland President Muse Bihi Abdi in the Ethiopian capital, Addis Ababa.
President Abdi said as part of the agreement, Ethiopia would also be the first country to recognise Somaliland as an independent nation in due course.
The MoU pave the way to allowing Ethiopia to have commercial marine operations in the region by giving it access to a leased military base on the Red Sea, Abiy's National Security Adviser Redwan Hussien said.
Somaliland would also receive a stake in state-owned Ethiopian Airlines, Hussien said, without providing further detail.
Somaliland has not gained widespread international recognition despite declaring autonomy from Somalia in 1991. Somalia says Somaliland is part of its territory.
Somalia's SONNA state media agency reported last week that following mediation efforts led by Djibouti, Somalia and Somaliland had agreed to resume talks aimed at resolving their disputes.
(Reuters - Reporting by Dawit Endeshaw and Abdi Sheikh, writing by Bhargav Acharya; editing by Andrew Heavens and Jason Neely)