A landmark visit by Somalia's president to Ethiopia was followed by two countries announcing that they would restore full diplomatic relations.

Somalia and Ethiopia are set to restore full diplomatic relations after a visit by Somalia's President Hassan Sheikh Mohamud to Addis Ababa, as efforts intensify to heal a year-long rift that threatened further instability in the Horn of Africa.

The rift began when Ethiopia signed a controversial agreement with Somaliland, Somalia’s breakaway region, reportedly offering to recognise its independence in exchange for a Red Sea port and a milita

The two countries are looking to build on a recent peace deal that aims to defuse mounting tension in the Horn of Africa.

Ethiopia and Somalia agreed to work together on a multinational force battling Islamist insurgents, signaling a further reduction of diplomatic tensions between the neighboring countries.

Somalia's president will visit Ethiopia on Saturday, his office said, the strongest sign yet of improving relations between the two neighbours after a year of tensions over Addis Ababa's plans to build a naval base in a breakaway Somali region.