Taha and Garang inked the deal ending 21 years of civil war in their country at Kenya's Nyayo National Stadium with a host of African heads of state and others looking on.
Kenyan President Mwai Kibaki, whose country spearheaded mediation efforts, and Ugandan President Yoweri Museveni, the current chairman of the regional development organization that sponsored the talks, signed the agreement as witnesses.
Thousands of singing and dancing Sudanese, many of them refugees who live in Kenya, filled the stadium, proclaiming that the accord will bring "a new dawn" to the war-ravaged country.
Sudanese President Omar el-Beshir, who put Taha in charge of the peace talks, Algerian President Abdulaziz Bouteflika, Rwandan President Paul Kagame and US Secretary of State Colin Powell also attended the ceremony.
The agreement, which puts an immediate ceasefire into place, is the culmination of lengthy negotiations that kicked off in earnest in Kenya in early 2002, after numerous false starts since Khartoum and the rebels adopted an agenda for such talks in 1994.