A vote to decide King Gyanendra's future is due next year
The pact formally ended a 10-year insurgency that killed 13,000 people. Under the landmark deal, the rebels will join a transitional government.
King Gyanendra took over power in February 2005, but was forced to step down by a popular uprising last April.
On Monday a panel held him responsible for excesses against pro-democracy protesters in the uprising.
Prayer for peace
In a statement, the monarch expressed his pleasure that "a peace agreement has been concluded in keeping with the nation's need and people's aspirations".
The king expressed the hope that "by ensuring sustainable peace, a prosperous Nepal can now be built with the collective efforts of all Nepalese people through multi-party democracy".
The monarch also prayed for "the eternal peace of the souls of all Nepalese who lost their precious lives".
The country's multi-party government and the Maoist rebels have been observing a ceasefire for more than six months since they co-ordinated mass protests that forced King Gyanendra to restore parliament and end direct rule.
The king has subsequently been stripped of all executive powers including the control over the 90,000-strong army.
There has been a persistent call for the abolition of the monarchy since then.
A constituent assembly election is due to be held early next year to decide its future.
Flag of Nepal

Nepal's 10-year civil war has come to a peaceful conclusion with the signing of a historic accord between Prime Minister Girija Prasad Koirala and Prachanda, leader of the Maoist rebel faction that had been fighting for political change. The deal was signed in Kathmandu on Tuesday.

The deal would allow the Maoists into the Nepalese government, and place both Maoist and government weapons under UN scrutiny. The Maoists had been observing a ceasefire since its declaration more than six months previously.

Prachanda said that the peace agreement would end the 238-year old feudal system. He added that his party would work with new responsibility and make new strong Nepal.

Meanwhile, Koirala said that the deal ended the politics of terron and violence and started the politics of co-operation. He thanked Prachanda to find out a peaceful solution in the country.

The government and the Maoist rebels were accused of human rights abuses in fighting that killed more than 13,000 people.

Nepalese king Gyanendra Singh has welcomed Tuesday's peace deal between the government and the Maoist rebels.