Both Tuareg and Islamist rebels have agreed to join hands to work together in Northern Mali which they have seized control of.
The National Movement for the Liberation of Azawad (Tuareg MNLA) and the Ansar Dine movement struck a deal to create a separate Islamic state in Northern Mali.
"The agreement reached this evening will see the merging of the two movements - the MNLA and Ansar Dine - to create an independent Islamic state," MNLA spokesperson Mohamed Ag Attaher was quoted by Reuters as saying.
The movements said they have created a transitional council of the Islamic state of Azawad and were in complete favour of its independence.
"It will also see the merging of our two forces and the appointment of an executive authority for the Azawad state," Attaher added.
The rebels have been divided for long by the ideologies of the secular Tuareg and Islamist Ansar Dine.
This will be considered as a major change in the country of northern Mali which was captured during a coup.
They signed the agreement in the northern town of Gao on Saturday night amidst celebratory gunfire.
The development could be worrisome for a few, as the Ansar Dine reportedly has links with Islamic militant groups including the al-Qaida of Africa. The group is allegedly involved in kidnapping of foreigners and suicide bombings in the region.
This is also expected to create fresh problems for the southern Mali as well as for the West African bloc ECOWAS.
The agreement comes at a time when Mali's interim president Dioncounda Traore is in France on a private visit and is scheduled to return to the country only a week later.
Both the groups took control of northern Mali ousting the then government by the end of March.
The Tuareg rebels launched an attack on the Malian army in January which was later strengthened by the arrival of the Islamist Ansar Dine movement.