Nairobi - The presidents of Kenya, Tanzania, Rwanda, Uganda and Burundi have agreed to the free movement of people and goods across the region.
It is hoped that the deal will lead to greater economic clout for the region. The common market is due to come into effect by July 2010.
The East African Community was launched 10 years ago and has a population of 120 million.
The BBC's Will Ross in Nairobi said there had been fears that Kenya, as the economic heavyweight, would dominate.
So until recently Kenya had still been subject to taxes as a way of helping the other countries' industries catch up.