Ethiopia, Egypt and Sudan have agreed to resume talks over the Grand Renaissance Dam reservoir on the River following a virtual summit.
The project has been a source of huge diplomatic tension since its construction began in Ethiopia in 2011.
Ethiopia sees the hydroelectric project as crucial for its economic growth and a vital source of energy.
But Egypt and Sudan, which are downstream, fear the large dam will greatly reduce their access to water.
Years of fraught negotiations have failed to reach a consensus on how and when to fill the reservoir, and how much water it should release.
If it becomes 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 struck during a meeting of the African Union, chaired by South African President Cyril Ramaphosa.
In a statement, Ethiopian leader Abiy Ahmed hailed the progress, adding that the $4bn (£3bn) dam was already “overtopping” due to rains over the last couple of weeks.
Ethiopia had always said it would fill the dam in July, while Egypt had warned it to delay while talks continued.
In a statement, Egypt’s presidency said future negotiations would focus on “developing a binding legal agreement on the rules for filling and operating” the dam.