LONDON -- Azerbaijan has announced it is suspending its military offensive in Nagorno-Karabakh, after ethnic Armenian authorities in the disputed enclave agreed to lay down their arms in an apparent capitulation.

Nagorno-Karabakh's Armenian-led government on Wednesday morning said they had agreed to a ceasefire after Azerbaijani forces made major advances in the day-long offensive that has sparked warnings of humanitarian disaster and risks of large-scale ethnic cleansing.

In a statement, the enclave's ethnic Armenian authorities said under the agreement all Armenian military units would withdraw from the enclave and local forces would be disbanded and fully disarmed. It said a "complete cessation of hostilities" would begin from 1 p.m. Wednesday.

Azerbaijan's defense ministry said Armenian forces had agreed to "lay down their weapons, leave their combat positions and military posts and disarm completely. Units of the Armenian armed forces [will] leave the territories of Azerbaijan, illegal Armenian armed groups [will be] dissolved."

Both sides said talks on issues around the "reintegration" of the enclave into Azerbaijan would be held on Thursday in the city of Yevlakh.

The agreement was brokered via the Russian peacekeeping contingent in Nagorno-Karabakh, which was established after the last major fighting there in 2020.

Armenia and Azerbaijan have fought over Nagorno-Karabakh for decades following the collapse of the Soviet Union. The enclave is internationally recognised as part of Azerbaijan, but has been controlled and largely inhabited by ethnic Armenians since a war in the 1990s following the collapse of the Soviet Union.

Azerbaijan launched a major new offensive overnight on Monday, demanding the enclave's ethnic Armenian government dissolve itself and asserting that it would restore control over the territory.

Azerbaijani forces attacked along the frontline in Nagorno-Karabakh and began shelling the regional capital, called Stepanakert by Armenians. Over a hundred people were reported injured and several killed, according to local Armenian authorities. Thousands of people were reported to be sheltering in basements and video posted online by local media appeared to show hundreds of civilians seeking shelter at a Russian peacekeeper base.

The ethnic Armenian government, which calls itself the Republic of Artsakh, wrote the decision to lay down arms was made after "enemy succeeded in penetrating into defense army outposts, capturing several heights and strategic road junctions."

"In the current situation, the international community's actions in the direction of ending the war and resolving the situation are insufficient. Taking this into consideration, the authorities of the Republic of Artsakh accept the proposal of the Russian peacekeeping contingent's command regarding a ceasefire," the Nagorno-Karabakh Presidential Office said.

The Azerbaijan offensive had sparked warnings tens of thousands of ethnic Armenians might be driven from their homes, raising the specter of large-scale ethnic cleasning in the enclave.

It was unclear what agreement would mean for the enclave's administration and the ethnic Armenians living there.

The Karabakh Armenian government in its statement said the talks on Thursday would discuss "issues raised by the Azerbaijani side on reintegration" and "ensuring the rights and security of the Armenians of Nagorno-Karabakh….within the framework of the Constitution of Azerbaijan."

Before the ceasefire agreement, the United States, Russia, as well as France and the European Union had urged an immediate end to the Azerbaijan's military operation.

The apparent success of Azerbaijan's lightening offensive appeared to mark a historic turning point in the decades-old conflict, furthering a steep reversal in Armenia's control over the enclave that began in 2020. Backed by Turkey, Azerbaijan reopened the conflict in October 2020 with a short war, that ended with Armenia's defeat and a Russian-brokered peace agreement.

Since then Azerbaijan had tightened its grip around Nagorno-Karabakh, imposing a blockade for the last 9 months that has created shortages of food and medicine.

Since the 2020 war, Armenia's government under prime minister Nikol Pashinyan has distanced itself from the Karabakh government and abandoned Armenia's claim to the enclave. Pashinyan declined to declare war following the new Azerbaijani offensive and on Wednesday said Armenia had no involvement in Wednesday's ceasefire agreement.

Police in Armenia's capital Yerevan on Tuesday night clashed with hundreds of protesters outside state buildings, angry with what they saw as the government's failure to defend Karabakh.

Azerbaijan's offensive also appeared to underline Russia's weakened influence in the region, long considered its southern backyard, that has been accelerated by the war in the Ukraine. Azerbaijan is allied with Turkey, which publicly backed this week's offensive and has supported Azerbaijan previously with weapons and military advisors.

Russia is formally in a security pact with Armenia but besides deploying peacekeepers has not intervened on its behalf. Armenian politicians have expressed frustration with Moscow and suggested the country should seek closer ties with Western countries, including the United States, which this month held a small military training exercise in Armenia.