Prime Minister David Cameron and Scottish First Minister Alex Salmond signed an agreement on Monday to hold a referendum in 2014 on Scottish independence.
TV pictures showed the two men signing the agreement in Edinburgh.
"The referendum agreement has been signed," a spokeswoman for Cameron's Downing Street residence told AFP, following talks in Edinburgh between Cameron and Salmond, who leads the pro-independence Scottish National Party.
The referendum could lead to the United Kingdom breaking up after 300 years, leaving only England, Wales and Northern Ireland in the union.
Cameron strongly opposes a Scottish breakaway and the signing of the terms fires the starting gun on two years of campaigning pitching the leaders on opposite sides.
After months of negotiations, the deal is expected to give Scotland's administration the power to hold a vote in the final quarter of 2014, offering Scots a straight yes-or-no question on leaving the United Kingdom.
But support among Scots for independence appears to be slipping, with a survey by pollsters TNS-BMRB released last week showing 28 percent in favour and 53 percent opposed.