(CNN) -- The Philippines has reached a preliminary agreement with Muslim rebels after 15 years of talks, the president announced Sunday, marking a major milestone after decades of militant insurgency in the nation's troubled south.
The Moro Islamic Liberation Front has fought for decades for an independent Islamic state in southern Philippines. It has been blamed for rampant attacks in the region.
President Benigno Aquino III described the deal as a "framework agreement" for establishing a new autonomous region to be administered by Muslims in the south.
It comes after 15 years of negotiations between the government and the rebels.
"This framework agreement paves the way for a final, enduring peace in Mindanao," Aquino said. "It brings all former secessionist groups into the fold; no longer does the Moro Islamic Liberation Front aspire for a separate state."
It also provides a framework on issues such as power structure and revenues in the southern region.
"This means that hands that once held rifles will be put to use tilling land, selling produce, manning work stations and opening doorways of opportunity for other citizens," he said.
The new autonomous region will be named Bangsamoro.
"It deserves a name that symbolizes and honors the struggles of our forebears in Mindanao, and celebrates the history and character of that part of our nation," the president said.
The preliminary deal marks a major milestone after years of negotiations with the Moro group to help end an insurgency that has killed tens of thousands.
The Moro group is estimated to have 12,000 members, but military sources say it may have been splintered when government troops conducted offensives in 2000.
British and American officials applauded the agreement.
"I wholeheartedly welcome the announcement of the framework agreement ... to bring peace and development to Muslim Mindanao," Foreign Secretary William Hague said in a statement. "This is a testament to the commitment and vision of the parties."
U.S. Secretary of State Hillary Clinton called the agreement "a testament to the commitment of all sides for a peaceful resolution to the conflict in the southern Philippines."
The new region is expected to replace the current one by 2016, when the president's term ends, according to officials.
Journalist Maria A. Ressa contributed to this report