BRASILIA , Brazil (CNN) -- Peru and Ecuador have accepted an international plan to settle a 57-year border dispute that has led to three wars and numerous border skirmishes between the two South American neighbors.

The settlement, mediated by Brazil, Argentina, Chile and the United States, will be signed Monday in Brasilia by Peruvian President Alberto Fujimori and Ecuadorian President Jamil Mahaud. It was officially unveiled by Brazilian officials Friday, after being accepted by both sides.

"Starting Monday, we are going to have peace in both countries, hopefully forever," Mahaud said.

"This is one huge problem out of the way. Both countries are winners because both have achieved peace," Fujimori said.

Peru and Ecuador share a 1,600-kilometer (1,000-mile) border, most of which runs through thinly populated jungle. About 80 kilometers (50 miles) of the border was in dispute.

Under terms of the pact, the boundary in the disputed area will follow the heights of the Cordillera de Condor mountain range, as Peru has maintained it should. But each side will create demilitarized national parks along either side of the new border.

Also, an outpost called Tiwintza will be granted to the Ecuadorian government as its private property, though it will remain under Peruvian sovereignty. Tiwintza is symbolically important to Ecuador because its troops defended the area in 1995 against repeated assaults by Peruvian troops.

The settlement was drawn up by the four mediating powers. Earlier this month, the legislatures of both Peru and Ecuador had agreed to be bound by whatever settlement was put forward.

"We are today on the verge of a new era, not just for Ecuador and Peru, but also for our entire continent, which confirms our vocation for peaceful co-existence and universal cooperation," Brazilian President Fernando Henrique Cardoso said in a televised address to the people of Peru and Ecuador.

The end of the dispute is expected to enable the two Andean neighbors to cut defense spending, engage in bilateral trade and attract international aid and investment.

In the past few years, Peru had acquired a squadron of sophisticated MiG-29 fighter planes, sparking fears of a regional arms race that would drain resources badly needed to develop the two countries' impoverished economies.

While there had been little chance of wide-scale fighting between Peru and Ecuador, international investors had regarded the simmering dispute as a threat to stability.

The conflict dates to 1941, when the two countries fought a war along their Pacific coast at a time when their jungle border was undefined. They agreed to a process to mark the border in 1942, but Ecuador bailed out before the last section was complete.

Reuters contributed to this report.