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The project has been the source of great diplomatic tension for almost a decade.
Ethiopia, Egypt and Sudan agreed to resume talks on the reservoir of the Great Renaissance Dam on the Blue Nile, after a virtual summit.
The project has been the source of great diplomatic tension since construction began in Ethiopia in 2011.
Ethiopia considers the hydroelectric project to be crucial for its economic growth and a vital source of energy.
But Egypt and Sudan, downstream, fear that the large dam will greatly reduce their access to water.
Years of tense negotiations have failed to reach consensus on how and when to fill the reservoir, and how much water should be released.
If operational, the dam will generate 6,000 megawatts, making it the largest hydroelectric dam in Africa. It will provide power to some 65 million Ethiopians, who currently lack a regular electricity supply.
The agreement to resume talks was reached during an African Union meeting, chaired by South African President Cyril Ramaphosa.
In a statement, Ethiopian leader Abiy Ahmed praised the progress, adding that the $ 4 billion (£ 3 billion) dam was already “collapsing” due to rains in recent weeks.
Ethiopia had always said it would fill the dam in July, while Egypt warned that it be delayed as talks continued.
In a statement, the Egyptian presidency said future negotiations will focus on “developing a binding legal agreement on the rules to fill and operate” the dam.
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