The provincial government has committed to reducing greenhouse gas emissions from those sources by 25 per cent of 2007 levels by 2020.
The province said this agreement would result in a further reduction of greenhouse gas emissions by 2030, though officials are still working on the targets.
The federal government said those targets would likely be announced in June.
Federal Environment Minister Peter Kent said the agreement means the province will need to meet or exceed the federal regulations, but it will have flexibility in setting out how the targets are met.
"It allows Nova Scotia to manage the transition to renewable energy in its different forms," Kent told a news conference in Halifax.
Catherine Abreu, regional co-ordinator of the Atlantic Canada Sustainable Energy Coalition, said she hopes the agreement will lead to the closure of coal plants.
"It's great to see Nova Scotia taking a leadership position nationally on greenhouse gas reductions in the electricity sector," said Abreu.
"I think it really showcases the progressive movement that Nova Scotia is making toward developing sustainable energy policy."
The federal and provincial governments say Nova Scotia is the only province with hard caps on greenhouse gas emissions in the electricity sector.