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The war began in 1946 between nationalist forces of the Communist Viet Minh under leader Ho Chi Minh and France, the occupying colonial power.
But there is no lasting agreement on peace in Korea, the main subject of the talks in Geneva, Switzerland between France, Britain, the USA, the USSR, China and countries of Indo-China.
The news of a ceasefire has come as a great relief in Europe and the United States.
The newly appointed French Prime Minister, Pierre Mendes-France, had set a deadline for an agreement that was finally signed in the early hours of this morning.
This afternoon he told the French Parliament he had achieved his aim of "an honourable settlement" to end a war that has cost at least 300,000 lives.
However, there is concern that the terms of the Geneva Accord concede too much to the Viet Minh - not least in the United States which gave $385m to equip the Vietnamese Army.
President Dwight D Eisenhower said in a statement from Washington the agreement contained elements which he did not like - such as the division of Vietnam between north and south - and a great deal depended on how they worked in practice.
Senate leaders from both parties went one step further and expressed their alarm at what is widely regarded as a victory for Communism.
"We may regret that such an agreement has been forced upon the French," said Senator William Knowland, Republican and Senate Majority Leader.
The conference was the first international meeting at which the Communist government of China took part.
The main provisions of the Geneva Accord are:
In Saigon, Supreme French Commander General Paul-Henri-Romuald Ely promised the Vietnamese Army that "in peace, as in war, we will remain at your sides".
In a message to the Vietnamese people he said France would pay for transportation of all those who wanted to leave Communist-controlled Vietnam.
Since the Geneva conference opened on 26 April the French have suffered major defeats at the hands of the Viet Minh, the last and most humiliating being the fall of Dien Bien Phu on 7 May after a 55-day siege. It signalled the end of French rule in Indo-China.
Last month France began a major retreat giving up the south zone of Tonkin's Red River delta leaving behind 2.5 million people and a fertile rice-growing region.
France created the territory of Indo-china in 1887 out of its four colonies - Cochin China, Annam, Tonkin (all now part of Vietnam) and Cambodia. Laos was added in 1893.
Between 1940 and 1945 the region was occupied by Japan.
The Viet Minh was formed in 1941 as a nationalist party whose main aim was to free Vietnam from French control. Its Communist leader, Ho Chi Minh, declared Vietnamese independence on 2 September 1945.
In March 1946, France recognised the Vietnam Republic that controlled Tonkin and part of Annam north of the 16th Parallel in March 1946 but fighting broke out after disputes about control over the rest of Annam and Cochin China.
The war began as a battle for independence from French imperialism.
But France, whose economy could ill afford such an expensive war, gradually conceded more power to indigenous nationalists and found itself supporting them against the armies funded and backed by Communist China.
After the Geneva Accord, two million North Vietnamese fled to the South.
South Vietnam's Prime Minister Ngo Dinh Diem refused to hold talks with the Viet Minh on elections to unify the country.
China, the Soviet Union and the Viet Minh gave material and moral support to the Viet Cong, Communist rebels in US-backed South Vietnam.
The United States, which had opposed the division of Vietnam at the Geneva talks, intervened in the mid 1960s to defend the 17th Parallel resulting in the long and bloody Vietnam War which finally ended in 1975.
The Communists then took over Vietnam in 1975 and in 1976 the two parts of Vietnam were united and Saigon was renamed Ho Chi Minh City.
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