Details of the agreement have not yet been released and a news conference was being planned for Thursday at 10:00 GMT in the Egyptian capital, where talks have been taking place since Tuesday.
Under the agreement, the West Bank-based Palestinian Authority is to resume full control of the Hamas-controlled Gaza Strip by December 1, according to a statement from Egypt's government.
"Egypt's involvement and the entry of the PA into Gaza is an opportunity for change, but as long as Hamas remains an armed terrorist organization, Palestinian reconciliation is a legitimacy for Hamas and terrorism rather than a takeover [by the PA]".
The agreement stipulates that legislative, presidential and national council elections should be conducted within one year of its signing, though details of the reconciliation deal have not yet been made public.
Two weeks before this, another meeting will be held in Cairo (on November 14) between representatives of all Palestinian factions, the same source said, adding that this meeting would discuss "mechanisms" for implementing the reconciliation agreement.
United Nations Secretary-General António Guterres has congratulated by phone Mahmoud Abbas, President of the State of Palestine, on the intra-Palestinian agreement, signed earlier Thursday in Cairo.
The official was referring to the diplomatic Quartet on Middle East peace, which includes the United Nations, the United States, the European Union and Russian Federation.
Hamas does not recognise Israel and has fought three wars with the Jewish state since 2008.
Faced with increasing isolation and a severe electricity shortage, Hamas has reached out to Cairo for help, hoping to have the Rafah border with Egypt opened.
Attempts at reconciliation in recent years fell apart.
Last week, Palestinian Authority prime minister Rami Hamdallah visited Gaza for the first time since 2015 and his ministers took formal control of government departments in the territory. "Unity and national reconciliation among the Palestinian people are our strategic option for moving forward".
Reconciliation could also pose a dilemma for global efforts to reach an Israeli-Palestinian peace deal since Hamas has not recognised Israel, unlike the Abbas-led Palestine Liberation Organisation.