Fighting between Israel and Hezbollah will end at 4am local time (2am GMT) on Wednesday, Mr Biden said.
It will bring an end to nearly 14 months of fighting which has seen more than 3,500 Lebanese killed and more than 15,000 injured.
Israeli strikes into Lebanon have forced 1.2 million people to leave their homes, while Hezbollah attacks have driven some 50,000 Israelis to evacuate the country’s north.
Hezbollah rockets fired into Israel have killed at least 75 people, more than half of them civilians, and more than 50 Israeli soldiers have died in the ground offensive in Lebanon.
The Iran-backed group began firing into northern Israel a day after Hamas militants rampaged across the border from Gaza into Israel in October last year, sparking the war in Gaza.
What does the deal involve?
The agreement reportedly calls for an initial 60-day halt in fighting between Israel and Hezbollah.
Hezbollah forces would leave their positions in southern Lebanon and retreat north of the Litani River, which runs around 30km (20 miles) north of the border with Israel.
Israel will withdraw its forces from Lebanon over a period of 60 days, Mr Biden said, as the Lebanese army takes control of its territory near the border to ensure Hezbollah does not rebuild its infrastructure there.
The move would allow civilians on both sides to “safely return to their communities,” he added.
Lebanon’s foreign minister Abdallah Bou Habib said the Lebanese army was prepared to deploy at least 5,000 troops in southern Lebanon as Israeli soldiers withdraw.
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Biden says ceasefire reached
What if the agreement is broken?
Israeli Prime Minister Benjamin Netanyahu said his country would respond forcefully to any ceasefire violation by Hezbollah, saying Israel would retain “complete military freedom of action”.
“If Hezbollah breaks the agreement and tries to rearm, we will attack,” he said. “For every violation, we will attack with might.”
Mr Biden also said Israel reserved the right to retaliate if Hezbollah breaks the terms of the ceasefire, adding: “What is left of Hezbollah and other terrorist organisations will not be allowed to threaten security again.”
Who will monitor the ceasefire?
The ceasefire agreement will be monitored by an international panel led by the US, along with thousands of Lebanese troops and UN peacekeepers deployed around Lebanon’s border with Israel.
Israel’s defence minister Israel Katz has insisted Israel’s military would strike Hezbollah if the UN peacekeeping force UNIFIL did not provide “effective enforcement” of the deal.
The US will work with the Lebanese army to deter potential violations, but no US combat troops will be stationed in the area, a senior US official said.
In a joint statement, Mr Biden and French President Emmanuel Macron said France and the US would work together to ensure the terms of the deal were followed.
What happens next?
Although the ceasefire deal brings to an end over a year of hostilities between Israel and Hezbollah triggered by the Hamas attack on Israel on 7 October last year, the devastating war in Gaza rages on.
Mr Biden said the US will make another push to achieve a ceasefire and hostage release deal between Israel and Hamas in Gaza.