Bangladesh and India have signed a historic agreement to simplify their border by exchanging more than 150 enclaves of land, the BBC News reported Saturday.

India's Prime Minister Narendra Modi ratified the deal with his counterpart Sheikh Hasina in Dhaka.

Thousands of Bangladeshis inhabit more than 50 enclaves in India, while Indians live in around 100 areas within Bangladesh.

The countries will now swap territories and residents can choose where to live.

"We have resolved a question that has lingered since independence. Our two nations now have a settled boundary," Modi said at a press conference.

"We are not just neighbors, but nations bound by the threads of history, religion, culture, language and kinship - as well as a passion for cricket."

Modi and Sheikh Hasina have also agreed to inaugurate a bus service that will link the Indian cities of Kolkata (Calcutta), Agartala, Guwahati and Shillong with Dhaka.

The agreement is significant because it is the first step by Bangladesh to allow road transit to India, a long-running Indian demand which it hopes will eventually enable it to have better access to its north-eastern states.