Kosovo and Serbia resolved a long-running row over vehicle license plates on Wednesday.
The Kosovo government had planned to start issuing fines from Thursday to drivers who continue to use Serbian-issued car license plates.
"We have a deal," EU foreign policy chief Josep Borrell announced on Twitter.
"Very pleased to announce that chief negotiators of Kosovo and Serbia under EU-facilitation have agreed on measures to avoid further escalation and to fully concentrate on the proposal on normalization of their relations."
The EU has been mediating talks between Serbian President Aleksandar Vucic and Kosovo Prime Minister Albin Kurti in Brussels this week.
When talks on Monday stalled, the United States asked Kosovo to delay the introduction of fines for 48 hours so a deal could be reached.
Kosovo's President Vjosa Osmani said "Kosovo is grateful" for Washington's support of dialogue between the two countries.
What was the Kosovo-Serbia license plate row about?
Earlier this month, the Kosovo government decided to ban Serbian-issued license plates after an almost two-year-long dispute.
The move prompted a number of lawmakers and officials in Mitrovica to resign. The Serb-minority region in northern Kosovo is backed by Belgrade.
The dispute comes on top of tensions between Belgrade and Pristina, with the former refusing to recognize Kosovo's statehood after it broke away from Serbia in 2008.
That unilateral move came after a 1998-99 war in which about 13,000 people died amid a separatist rebellion by ethnic Albanians and a brutal Serbian crackdown. The war ended after NATO bombed Serbia.
rt/zc (AP, Reuters, AFP)