Meanwhile, a United Nations commission accused South Sudan's warring sides of deliberately starving people for strategic gain.
South Sudan's former rebel leader Riek Machar said he has agreed to form a unity government with President Salva Kiir by Saturday's deadline, following talks at the state house on Thursday.
Before the announcement, it was not clear whether the February 22 deadline would be met as key benchmarks of the 2018 peace agreement had not been fulfilled.
The deadline had lapsed several times without an agreement between the two sides.
"We had a meeting with the president on outstanding issues. We have agreed to form a government on 22 February," Machar said.
Kiir confirmed the agreement.
"We have agreed to form the government," he said after the meeting, adding he will appoint Machar as first vice president on Friday.
"We are going to discuss the security arrangement for the protection of all opposition forces and members," Kiir added.
"And if there are things we have not agreed upon, we had agreed to resolve them. We shall finalise them in coming days," Kiir said.
Kiir and Machar have been allies as well as rivals – both on the battlefield and in politics. Both men fought against each other and rose to power during Sudan's 1983-2005 civil war between north and south.
Machar has twice served as vice president under Kiir.
Civil war broke out again in South Sudan in December 2013 after Kiir sacked Machar as vice president for allegedly plotting a coup.
The two-year war ended in the world's youngest nation after a peace deal was signed by the two leaders in August 2015.
The deal was brokered by the regional eight-nation IGAD bloc, along with the UN, the African Union, China, Britain, Norway and the United State. The country also faced UN sanctions if a deal could not have been reached.
Political wrangling over the nitty-gritty of the peace deal and sporadic violence ensued after Machar returned to Juba in April and retook the post of vice president.
But that truce did not last long and the sides went to war once again in July 2016.
UN blames rival sides for starving civilians
South Sudanese officials have diverted millions of dollars of state funds that are badly needed by civilians as the country staggers away from civil war, a United Nations commission said on Thursday. It accused rival sides of deliberately starving people for strategic gain.
The bleak report by the Commission on Human Rights in South Sudan comes two days before a crucial deadline for the nation’s rival leaders to join forces in a coalition government.
“Today in South Sudan, civilians are deliberately starved, systematically surveilled and silenced, arbitrarily arrested and detained and denied meaningful access to justice,” the report says. It adds to widespread concerns that scattered deadly violence, the use of child soldiers, repression and sexual violence continue to imperil the fragile peace in the world's youngest nation.
Throughout South Sudan's five-year civil war, various watchdog groups have accused officials in Kiir's government of profiting from the conflict and siphoning off massive amounts of money meant for the benefit of the country and its some 12 million people.
“Corruption has made several officials extremely wealthy at the expense of millions of starving civilians,” the UN commission's new report says.
“Corruption has been so lucrative that it has infected every sector of the economy and every state institution.”
The graft has been carried out while the civil war killed nearly 400,000 people and sent more than 2 million fleeing the country.
Revenue authority accused of corruption
The UN commission says it has grounds to believe there has been a “steady diversion” of millions of dollars of revenue not linked to South Sudan’s oil sector into the National Revenue Authority.
The authority by law is meant to retain only 2 percent of revenue collected, with the rest going to the government’s consolidated account, but the new report says it has credible evidence that in September the authority kept 56 percent of non-oil revenue. In October and November, the authority retained almost 80 percent.
Millions of dollars in public revenues vanished in September and October alone, the report says.
Considering that information, the UN commission said it believes government officials have engaged in “acts that amount to economic crimes,” including money laundering and using public money for personal gain.
There was no immediate comment from South Sudan’s government.
The UN commission says such looting occurs while roughly half of South Sudan’s people, or 6 million civilians, are going hungry.
Both government and opposition forces have deliberately starved civilians to achieve military objectives, including by denying food to punish people suspected of supporting the enemy, the report says.
“Such policies were envisaged and implemented as part of a wider strategy to deprive enemy communities of resources in order to force their capitulation, allow soldiers and militias to reward themselves, forcibly displace communities from ancestral lands that could then be expropriated or simply to compel individuals to join different factions engaged in the conflict,” the report says.
South Sudan’s government has neither investigated nor punished perpetrators of such crimes, it adds.
A separate report released on Thursday by a multi-partner group surveying hunger in South Sudan says about 40,000 people in eastern Jonglei state are now facing famine conditions. Major flooding late last year was to blame along with the insecurity, it says.
A recent report by the UN humanitarian office in South Sudan says a quarter of the 319 violent incidents against aid workers and assets last year were attributed to state security forces.
State security forces or civilian authorities were blamed for 70 percent of the 216 nonviolent incidents, including bureaucratic impediments, reported last year.
“Humanitarians were requested to pay bribes by both state and non-state actors, which led to the detention of staff and threats of eviction. Humanitarian operations were disrupted by active hostilities and military operations,” the UN humanitarian office said.
One hundred and sixteen aid workers have been killed in South Sudan since the civil war began.