The agreement, hammered out after overnight discussions between Russia, Ukraine, France and Germany, would allow for the removal of heavy weaponry from the front and constitutional reforms that will grant more powers to rebel regions.
It could allow Ukraine to hold on to its restive eastern regions, where 5,300 people have died since April, while also giving Russia strong leverage to keep Ukraine from moving closer to the West.
It’s unclear, however, whether the agreement, which is set to go into effect on Sunday, will last. The previous ceasefire collapsed shortly after it was signed in September.
“This is a huge win for Russia,” said Aurel Braun, a professor of political science with University of Toronto and Harvard.
“The key thing here is not the rebels,” he said. “What I would emphasize is that we are mistaken if we look at rebel strategies. This is a Russian strategy, there is no rebel strategy.”
Braun said one of Ukraine’s primary successes was simply bringing an end to the bloodshed and giving it time to regroup.
Here are some key aspects of the ceasefire:
Ukrainian President Petro Poroshenko said that the agreement contains "a clear commitment to withdraw all foreign troops, all mercenaries from the territory of Ukraine," a reference to the Russian soldiers and weapons that Ukraine and the West say Russia has sent into eastern Ukraine to back the rebels.
Moscow denies the claim, saying any Russians in Ukraine are volunteers, although observers say it is almost certainly providing men and weapons to the rebel groups in the eastern regions of Luhansk and Donetsk.
Regaining control of its border
The deal calls for Ukraine to regain control of its borders along its eastern frontier with Russia that is currently controlled by the rebels.
This could allow Ukraine to halt the flow of Russian materiel into the country.
Moscow opposed this provision, saying it could lead to the encirclement of the rebel forces, The Guardian reported.
However, this is only set to be completed by the end of 2015, after Ukraine has completed reforms that would grant “special status” to the rebel-held regions.
It’s unclear if the ceasefire will hold that long.
In a key concession to Russia, the agreement calls for Ukraine to implement constitutional reforms granting wide powers to the eastern regions, including the right to form their own police force and trade freely with Russia.
“They gain a kind of legitimacy by being able to control those territories,” Braun said.
However, Kyiv has stressed that there was no agreement on any autonomy or federalization for eastern Ukraine, a longtime demand of Russia that wants it to maintain leverage over its neighbour.
Rebel leaders lauded the agreement.
"[We] give this chance to Ukraine to change its constitution, to change its attitude," Igor Plotnitsky, rebel leader in Luhansk, said on Russian television.
Local elections in rebel-held regions
The rebel regions will hold local elections, according to the terms of the agreement. A similar vote held last year was denounced by Ukraine and the West as a sham.
According to Braun, this could actually strengthen the rebels’ position because they will be able to take control of the elections and guarantee a strong showing for the secessionist cause.
“This is one of the things they can show that they are a genuine independence movement,” he said.
It’s unclear what will happen to the Ukrainian forces under siege in the important transport hub of Debaltseve when the ceasefire goes into effect.
Russian President Vladimir Putin said that the rebels consider the Ukrainian forces surrounded and expect them to surrender, while Ukraine says its troops have not been blocked.
Seizing the city would strengthen the rebels’ control of the region.
“It would be a huge symbolic and strategic loss,” Braun said.