Santos and Farc rebel leader Rodrigo Londono, better known by the nom de guerre Timochenko, also agreed the leftist guerrillas would lay down arms within 60 days of signing the deal, which now has an official deadline of March 23, 2016.
If successful, it would end a conflict that has killed 220,000 and displaced millions over half a century.
A lasting peace would also mark a huge advance for one of Latin America’s star emerging economies and could deal a setback to illegal narcotics trafficking.
Some Farc units have formed an alliance with drug cartels, exchanging protection for money.
The government and the rebels have been in talks in Havana for nearly three years, but this was the first time Santos had come to Cuba and the first time he had met Timochenko.
“We will not fail,” said Santos. “The time for peace has arrived.”
Moments later, Santos and Timochenko greeted each other with a handshake. Cuban president Raul Castro, who hosted the meeting, joined his hands to theirs.
The two sides agreed to create special tribunals to try former combatants, form an amnesty that would exclude those who committed war crimes or crimes against humanity, and provide reparations for victims.
With rebel negotiators insisting all along they would never go to jail, the special tribunals allow for less severe punishment for those who admit responsibility for their actions.
Those who readily admit to crimes would received five- to eight-year terms in undefined conditions of restricted freedom.
Those who come forward belatedly would get five to eights years in jail.
However, those who challenge accusations against them and are found guilty would face up to 20 years.
Timochenko repeated the rebels’ longstanding call for a bilateral ceasefire but also said the rebels were prepared to reach a peace deal even before the six months expire.
“We don’t want anything to stop this overflowing desire for peace and hope it will be forged in a hug of reconciliation,” Timochenko said.