If this deal succeeds, the Palestinian territories of the West Bank and Gaza will be reunited under one leadership for the first time since the Islamist militant group Hamas wrested control of the territory 10 years ago.
In 2014 a deal was struck, however Hamas reneged on the agreement and continued to rule over Gaza.
The agreement calls for Abbas's presidential guard to assume responsibility of the Rafah crossing on November 1, and for the full handover of administrative control of Gaza to the unity government to be completed by December 1.
The issue of introducing a joint PA, Hamas presence at Gaza's border crossings is key in efforts to encourage Israel and Egypt to lift the economic blockade that is now in place over the strip.
In a press statement, Egypt expressed its deep appreciation to the Fatah and Hamas movements for the positive spirit of the two delegations which led to reaching this agreement.
Mr Abbas will visit Gaza in "less than a month", a Fatah official told Agence France-Presse. A senior Fatah leader in the Gaza Strip, Zakaria al-Agha, said that Abbas "will be in Gaza within less than a month".
Israel viewed the Palestinian accord warily, saying it must abide by previous global agreements and terms set out by the Quartet of Middle East peace mediators - including the recognition of Israel and the disarming of Hamas. Hamas and Israel fought three devastating wars over the past decade.
The split has complicated any potential peace negotiations with Israel, as Hamas remains committed to the Jewish state's destruction and has vowed it will not hand over its arsenal as part of a reconciliation deal with the PA.
Since then, the relations between the two rival factions have been very tense and all attempts to reconcile them over the past years have failed to bring fruit. Egypt has been brokering the reconciliation talks.
Ahead of the negotiations in Cairo, Israeli President Benjamin Netanyahu warned against "fake reconciliations" and stated once again that Israel demands the demilitarization of Hamas.