French President Nicolas Sarkozy announced the landmark decision following talks with Syrian President Bashar al-Assad and Lebanese President Michel Sleiman, whose election in May ended a drawn-out political crisis in Lebanon.
"For France, this is historic progress," Sarkozy told a press conference."Of course there are a number of legal questions that have to be settled...but for us... this announcement is absolutely historic. It is great news for all those who love Lebanon and are concerned by developments there," he said.
Presidents Assad and Sleiman confirmed the news at a joint press conference later on Saturday.
"Our position is that there is no problem for the opening of embassies between Syria and Lebanon," said Assad.
"If Lebanon is willing to exchange embassies, we have no objections to doing it," he added.
For Lebanon, Sleiman confirmed that the two governments were going to "work together to put everything in motion as soon as possible."
Relations between Syria and Lebanon have been tense since the forced withdrawal of Syria's troops from the country in April 2005 after the assassination of billionaire former premier Rafiq Hariri.
Syria was widely blamed for the killing but denies involvement.
Assad last month said Damascus was ready to open an embassy in Lebanon once a unity government was formed and had developed good relations with Syria.
Lebanon announced a 30-member national unity government on Friday tasked with resolving the country's worst political crisis since a 1975-1990 civil war.
The Syrian and Lebanese leaders met at the French presidential palace in the presence of Qatari Emir Sheikh Hamad bin Khalifa al-Thani, whose country brokered the power-sharing deal that led to Sleiman's election.
Assad, who is among 43 leaders who will launch a new Union for the Mediterranean at a summit in Paris on Sunday, was marking the end of years of isolation in the landmark visit to France, his first since 2001.
His visit comes during France's presidency of the 27-nation European Union, and as France seeks to step up its Middle East diplomacy on the sidelines of the Mediterranean summit.
Immediately after Sarkozy announced the diplomatic breakthrough between Lebanon and Syria, he said he would be visiting Damascus in September, taking a further step in ending Syria's diplomatic isolation.
Franco-Syrian ties went into a deep freeze after the 2005 assassination of Hariri, who was a personal friend of Sarkozy's predecessor Jacques Chirac.
Chirac cut off all high-level contacts with Syria after repeatedly accusing it of having a hand in Hariri's assassination, a charge Damascus has consistently denied.
After Sleiman's election in May, Sarkozy moved to reward Assad by renewing high-level contacts.
France was the former colonial ruler in both countries and continued to maintain close ties with Lebanon.
France and the United States have both called on Lebanon and Syria to establish full diplomatic relations to bolster stability after Damascus's 2005 troop pullout.
The United States continues to blacklist Syria as a state sponsor of terrorism and initially reacted coolly to the rapprochement between Paris and Damascus.
But it has since said it is confident that Sarkozy is conveying the right message on the two governments' shared goals for the Middle East.
