Colombian President Juan Manuel Santos and Marxist rebel leader Timochenko used a pen made from a bullet tonight to sign an accord ending a half-century war that killed a quarter of a million people.

After four years of peace talks in Cuba, Mr Santos, 65, and Timochenko - the nom de guerre for 57-year-old revolutionary Rodrigo Londono - shook hands on Colombian soil for the first time in front of hundreds of dignitaries.

One man waved a large Colombian flag that had an extra white stripe in homage to the peace deal.

The end of Latin America's longest-running war will turn the FARC guerrillas into a political party fighting at the ballot box instead of the battlefield they have occupied since 1964.

2,500 foreign and local dignitaries at the ceremony in the Caribbean coastal city of Cartagena were asked to wear white and included United Nations Secretary-General Ban Ki-moon, Cuban President Raul Castro and US Secretary of State John Kerry.

Showing its support for the peace deal, the European Union has now removed the FARC from its list of terror groups.

Mr Kerry said Washington will also review whether to take the FARC off its terror list, and has pledged $390 million for Colombia next year to support the peace process.

"Anybody can pick up a gun, blow things up, hurt other people, but it doesn't take you anywhere ... Peace is hard work," he said of a rare diplomatic good news story for the Obama administration as it contends with the seeming intractable war in Syria and other conflicts.

Though there is widespread relief at an end to the bloodshed and kidnappings of past decades, the deal has caused divisions in Latin America's fourth-biggest economy.

Some, including influential former president Alvaro Uribe, are angered the accord allows rebels to enter congress without serving any jail time.

The agreement must be ratified during a 2 October plebiscite, but polls suggest it will pass easily.

The Revolutionary Armed Forces of Colombia, which began as a peasant revolt, became big players in the cocaine trade and had as many as 20,000 fighters at their strongest, will hand over weapons to the United Nations within 180 days.

"It's such an important day - now we can fight politically, without blood, without war," said Duvier, a 25-year-old rebel attending a FARC congress last week in the southern Yari Plains.

Colombians are nervous over how the remaining 7,000 rebels will integrate into society, but most are optimistic peace will bring more positives than problems.

Colombia's economy has performed well relative to neighbours in recent years, and peace should reduce security costs and open new areas for mining and oil companies.

But crime gangs could try to fill the void and landmines hinder development.

With peace behind him, Mr Santos, the scion of a wealthy Bogota family, will hope to use the political capital to push his economic agenda, especially tax reforms to compensate for a drop in oil income caused by a fall in oil prices.

Former tánaiste Eamon Gilmore, the EU's special envoy for the peace process in Colombia, has described tonight's signing as "hugely historic".

Speaking earlier on RTÉ’s News At One, Mr Gilmore said the conflict has had "huge human costs".

He said that he will be helping Colombia implement the agreement and he believed his knowledge of the Northern Ireland conflict has been helpful to the process.

Mr Gilmore said that this agreement is more comprehensive than the Good Friday Agreement and added that implementing it will be difficult.

"It runs to almost 300 pages and covers much more social and economic issues than the Northern Ireland agreement did.

"That said of course it also means that the challenges of implementing it are also very great as well. I think there is a sense in Colombia that this is a new beginning, this is giving a new opportunity to Colombia to move forward."