Free Aceh Movement fighters returned to peace talks with the government after mammoth waves crashed into Aceh's coastlines a year ago, leaving at least 156,000 of the province's people dead or missing and a half-million more homeless.
The two sides signed an accord in August, and the rebels last week finished handing over their self-declared 840 weapons. Tuesday's disbanding was the next major step under the plan, and it carried large symbolic weight.
"The armed wing of the Free Aceh Movement has demobilized and disbanded," said rebel commander Sofyan Daud, effectively ending the separatist insurgency that has killed at least 15,000 people since 1976.
"The Aceh national army is now part of civil society, and will work to make the peace deal a success," he said after meeting with President Susilo Bambang Yudhoyono in the provincial capital, Banda Aceh.
"We are entering a political era now. We do not need weapons anymore."
Instead, the guerrillas will participate in April elections in this province of 4 million people on the northern tip of Sumatra island.
Yudhoyono renewed his government's pledge to complete the withdrawal of more than 24,000 troops from Aceh by Dec. 31. In a tsunami commemoration speech a day earlier, he said the deal was "an example of how a new hope for peace can emerge out of the ruin of destruction."
The magnitude-9.0 earthquake that ripped apart the ocean floor off Sumatra island on Dec. 26, 2004, killed or left missing more than 216,000 people in 12 nations.
But Aceh was hardest hit, and as tens of thousand of corpses began piling up on the road in the disaster's aftermath, the rebels and the government decided they did not want to add to people's suffering.
When they returned to the negotiating table in Finland, both sides made concessions.
The rebels agreed to hand over their weapons and, in an about-face, gave up their demand for independence.
The government vowed to withdraw more than half of its nearly 50,000 garrison from Aceh and to give the region limited self-government and control over 70 percent of the oil- and gas-rich province's mineral wealth.
So far, the deal has stuck with the help of international peace monitors.
On Tuesday, both sides played down the prospective threat from a proposal by Indonesia's military chief Gen. Endriartono Sutarto, who suggested sending up to 500 new troops to Aceh to help with tsunami reconstruction.
Yudhoyono said any additional troops would number less than 1,000, and they would be engineers to build roads and bridges.
"This deployment should not disturb the ongoing peace process," he said.
A senior rebel negotiator, Irwandi Yusuf, said such a deployment would breach the peace accord, and he believed it would not happen.
"I'm not saying it will threaten the peace process if it goes ahead, but it shouldn't happen," Yusuf told The Associated Press.
Aceh's conflict first erupted in 1873 when Dutch colonialists occupied the previously independent sultanate. The Acehnese assisted Indonesia's successful 1945-49 war of independence against the Dutch, but launched a decade-long uprising in the early 1950s — this time against Jakarta's rule.
The current rebellion began in 1976.
A previous attempt to end the bloodshed collapsed in 2003 after the Indonesian military kicked out foreign observers and restarted combat operations against the rebels.