Russia has consented to the deployment of scores of civilian observers to monitor the political and security situation in Ukraine.
The 57 member countries of the Organisation for Security and Co-operation in Europe (OSCE) have agreed for an initial deployment of 100 monitors to regions in the east, south and west.
Up to 400 more could be added "as necessary and according to the situation", diplomats said.
Western countries have been pushing hard for an observer mission as a way of preventing an escalation of tensions in Ukraine following Russia's annexation of the Crimean peninsula.
Russia had blocked the plan on previous occasions.
OSCE vice-chairperson Thomas Greminger welcomed the decision as a "very meaningful contribution to de-escalate the situation in Ukraine".
While US ambassador Daniel Baer remained optimistic that the mission would have access throughout Ukraine, including Crimea, Russia maintained the observers would not be welcome in the Black Sea peninsula.
Pro-Russia supporters celebrate the annexation in Simferopol, CrimeaRussian Federation ambassador Andrei Kelin said observers have "no mandate over there ... Crimea is a part of the Russian Federation".
Mr Baer said OSCE teams would start deploying within 24 hours.
Meanwhile, Ukraine's foreign affairs minister said that a political association agreement signed between the European Union and Ukraine was the choice of the Ukrainian people.
Speaking in Brussels, Andrii Deshchytsia said the agreement had been on the table for years.
The highly symbolic piece of paper is part of the same EU deal that touched off Ukraine's political crisis when then-President Viktor Yanukovych rejected it in November and chose a bailout from Russia instead.
At the Kremlin, Russian President Vladimir Putin signed parliamentary legislation incorporating Crimea into Russia, hailing it as a "remarkable event".
Moscow celebrates the annexation of Crimea with a fireworks displayPrime Minister David Cameron and other EU leaders imposed sanctions on 12 more people to punish Moscow for its takeover of the Ukrainian territory.
The EU also agreed to step up moves to reduce the bloc's reliance on Russian energy. Mr Cameron said EU members needed to do more to develop their own reserves, as well as their ability to use gas from overseas producers, including the US.
The Prime Minister said: "Our message to Russia is clear: choose the path to diplomacy and de-escalation or face increasing isolation and tighter and tighter sanctions."
Mr Cameron also refused to rule out further sanctions against several oligarchs, including Chelsea owner Roman Abramovich.
The White House announced US President Barack Obama would be embarking on a six-day trip to Europe on Monday, including The Hague for a nuclear security summit and a meeting of the G7, then to Brussels for a summit of European leaders and a meeting with the Nato secretary general.
He will also be going to Rome and the Vatican to meet Pope Francis, before leaving the continent to head to Saudi Arabia.
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