Ethiopia's prime minister's office said on Thursday that an interim administration has been established for the northern Tigray region, marking a key step in implementing a peace plan to end the war in the restive region.

A statement posted on the prime minister's Facebook page said the Federation Council (the upper house of parliament) had formed the interim administration, and Prime Minister Abiy Ahmed had appointed Getachew Reza as its chairman.

Reza served as the federal government's communications minister under Prime Minister Hailemariam Desalegn, who ruled from 2012 to 2018.

The establishment of an interim administration for Tigray is part of a peace deal signed in South Africa in November between the Tigray People's Liberation Front (TPLF) and the federal government to end the war in the region, which has killed tens of thousands and displaced millions.

Reza, seen as a front for the Tigray People's Liberation Front (TPLF), signed the peace deal brokered by the African Union with Radwan Hussein, the prime minister's national security adviser.

The agreement provides for the establishment of an interim "inclusive" regional administration until elections are held.

The statement said it was necessary to "establish an inclusive interim administration to ensure sustainable peace and stop the conflict."

The announcement comes just a day after parliament removed the Tigray People's Liberation Front (TPLF) from its official list of terrorist organisations.