Regional and international powers that had taken opposing sides during the protracted crisis which has left the country without a president for six months united in welcoming the agreement hammered out in six days of negotiations.
"Hopefully this is not a Band-Aid solution and is a long-lasting one," said Beirut resident Aleco Assaf, 64. "People need to live in peace."
Across Lebanon, people were glued to radio or television sets listening to the Qatari prime minister announce the deal between government and opposition leaders after the talks in the Qatari capital Doha.
"I am very optimistic because finally we're going to be able to live," said Josiane Nakad, who sells swimwear in the Hamra district of west Beirut.
"I haven't had many sales lately because people didn't know whether they would be spending their summer on the beach or under the bombs.
"I just hope this is a long-lasting accord and not just a reprieve."
On the streets, in coffee shops and in telephone conversations, people could be heard congratulating each other on the end to the deadlock between the government and the opposition that erupted in sectarian bloodshed earlier this month.
In the southern coastal city of Tyre, drivers honked their horns on hearing the announcement with some shouting "Mabrouk" (congratulations).
"Since the deal was announced sales have been brisk," said Abu Fadi, who sells Lotto tickets in Beirut. "In the last two days no one was buying but today everyone is hoping that the deal will bring them luck."
Beirut resident Zeinab al-Said, 28, said she was especially happy that the agreement had brought an end to the opposition's 18-month-old protest camp outside government headquarters that turned part of the city centre into a ghost town.
"I am ecstatic," she told AFP. "I am sure things will get better. We're going to be OK."
Some older Lebanese expressed scepticism, however, that the rival leaders had really buried the hatchet.
"I have seen a lot in my 85 years and it usually only calms down a bit to start over again later," said Elie, who would not give his last name. "Maybe I'll be lucky enough to die when it's calm."
Regional powers which had taken opposing sides in the standoff -- Syria and Iran for the opposition and Saudi Arabia for the government -- all welcomed the agreement.
"We in Syria hail the efforts of the Arab (mediation) committee and underscore the importance of the entente reached among the brethren in Lebanon," Syrian Foreign Minister Walid Muallem told AFP in the Bahraini capital Manama.
"We hope this understanding will pave the way for a solution to the political crisis in Lebanon."
Syria's main regional ally Iran echoed the sentiment.
"The Islamic Republic of Iran hopes that the Doha accord... will provide a blossoming and brilliant future for the Lebanese people," the ISNA news agency quoted foreign ministry spokesman Mohammad Ali Hosseini as saying.
Iran's regional rival Saudi Arabia gave its backing to the deal.
"Saudi Arabia announces its support for the agreement between the Lebanese in Doha. We are very happy that this accord has been reached," its ambassador to Lebanon, Abdul Aziz Khoja, told AFP in Riyadh.
Former colonial power France also hailed the agreement. President Nicolas Sarkozy said it was "a great success for Lebanon and the Lebanese, who have never lacked courage and patience despite the trials they have been been through."
