The head of the Wagner force said he has ordered his mercenaries to halt their march on Moscow and retreat to their field camps in Ukraine to avoid shedding Russian blood.
The announcement from Yevgeny Prigozhin appeared to defuse a growing crisis as Moscow braced for the arrival of the private army led by the rebellious commander.
President Vladimir Putin had vowed he would face harsh consequences.
Mr Prigozhin said that while his men are just 120 miles from Moscow, he decided to turn them back to avoid “shedding Russian blood”.
He did not say whether the Kremlin has responded to his demand to oust Defence Minister Sergei Shoigu.
The announcement follows a statement from the office of Belarusian president Alexander Lukashenko saying that he had negotiated a deal with Mr Prigozhin after previously discussing the issue with Mr Putin.
Mr Prigozhin has accepted Mr Lukashenko’s offer to halt the Wagner group’s advance and further steps to de-escalate the tensions, Mr Lukashenko’s office said, adding that the proposed settlement contains security guarantees for Wagner troops.