Speaking after a meeting with US Secretary of State Antony Blinken, Borrell dubbed Ethiopia's peace process "one of the rare bits of good news that we have in the world".

But he stressed that the European Union and the United States would have to "continue working hand-in-hand" to support the agreement and only slowly restore normal ties with Prime Minister Abiy Ahmed's government.

"The message to both the government of Ethiopia and the Tigrayans is to make them understand that we are watching the settling of the conflict and will only normalise our relations in a gradual way, step-by-step," Borrell said.

The brutal two-year conflict pitted Ethiopian government forces against the rebel Tigray People's Liberation Front (TPLF), which briefly came close to capturing the capital.

UN investigators have warned there is evidence of crimes against humanity committed by both sides, and government forces blockaded the Tigray region for a time.

A humanitarian truce was declared early last year, and in November peace talks in the South African capital Pretoria produced a cessation of hostilities.

The TPLF agreed to disarm in return for the restoration of access to Tigray. Communications, banking, electricity and humanitarian aid were slowly restored to the region.

Last month, the Ethiopian parliament voted to remove the TPLF from a terrorist blacklist.