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Attacks by both sides were recorded until shortly before fighting stopped at 04:00 local time (02:00 GMT).
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People in Tel Aviv and Beirut shared feelings of relief and doubt as they reacted to the news.
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People displaced from northern Israel protested in Tel Aviv, unhappy with the ceasefire approved by Prime Minister Benjamin Netanyahu's Cabinet. Elsewhere in the city, the deal was greeted with more optimism.
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Israel will have 60 days to withdraw from Lebanon while Hezbollah must move north of the Litani river.
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NBC News' Andrea Mitchell reports on how a ceasefire deal between Israel and Hezbollah in Lebanon could impact the situation in Gaza and negotiations for a similar deal with Hamas.
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Israeli Prime Minister Benjamin Netanyahu said on Tuesday he was recommending that his Cabinet approve a ceasefire with Hezbollah to end hostilities in Lebanon.
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A Hezbollah spokesperson told Newsweek the group is "strong in the field and with every day that passes we become stronger."
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