ASEAN and China agreed on the implementation of the code of conduct in the South China Sea at an ASEAN meeting in Bali on Wednesday.
Singapore's Foreign Minister K Shanmugam described the move as a significant breakthrough.
Senior officials from both sides reached an agreement which could help reduce tensions in the South China Sea.
Although still at the early stage, the document raises hopes for a peaceful resolution to the overlapping claims in the area.
Singapore has described the latest development as a confidence building measure.
"ASEAN and China have shown flexibility to arrive at the guidelines both are comfortable with. The senior officials of ASEAN and China met today and have agreed on the guidelines, and those guidelines will be put to the foreign ministers tomorrow for endorsement," said Mr Shanmugam.
Mr Shanmugam said now that the guidelines have been settled it will pave the way for both ASEAN and China to go further and work on the code of conduct (CoC).
He added there is commitment to move forward with the CoC but he also admitted it does involve a number of issues that need to be dealt with.
However, it's to the benefit of all parties involved to complete it as quickly as possible.