Outgoing AU Commission chief Jean Ping "looks forward to the summit between President Omar al-Bashir of Sudan and President Salva Kiir of South Sudan," the African Union said.

"He would like to encourage both presidents... to reach agreement on the outstanding issues in the post-secession relations between their two countries."

The African Union has been mediating in the talks between the two Sudans in the Ethiopian capital. The talks resumed in early September and have focused on oil, border issues and the disputed Abyei area.

"Throughout its engagement, the AU... has maintained the view that solutions to the challenges at hand lie with the Sudanese people themselves," the African Union statement said.

Sudan's official news agency SUNA said Bashir would leave for the talks on Sunday and a government official in Juba confirmed that Kiir will also travel to Addis Ababa.

The European Union's top diplomat Catherine Ashton welcomed news of the Addis Ababa meeting and urged "both governments to conclude a comprehensive agreement on all outstanding issues".

In a statement Friday she said the two neighbours had already made significant progress, notably on oil and security issues.

"It is now for the two governments to build on the progress achieved ... and agree on the few remaining issues, including a safe demilitarised border zone," she said.

"This summit is a unique opportunity to set their countries on the path to peace and prosperity, based on the concept of two viable states."

Barnaba Marial, the South Sudanese government spokesman, told journalists Friday that the common border, which closed to most vehicles in June of last year, has now reopened and air traffic resumed.

"Yes, the flights have now opened Juba-Khartoum, Khartoum-Juba," he said.

The two neighbours agreed late last month to open their border in a bid to foster cooperation and to encourage business.

The two countries fought along their undemarcated frontier in March and April, sparking fears of wider war and leading to a UN Security Council resolution ordering a ceasefire.

The UN also ordered the settlement of unresolved issues under AU mediation.

A previous round of talks in early August led to a breakthrough deal on export fees that landlocked Juba will pay to Khartoum to ship its oil through northern pipelines. The details however still need to be finalised.

At independence, South Sudan took with it two-thirds of the region's oil, though processing and export facilities remained in the North.

In January, the South shut off oil production -- damaging the economies of both countries -- after accusing Sudan of stealing its oil.

Officials have said that even once a final deal is reached on oil it could then take from three to six months before exports could resume.

The AU set a September 22 deadline for this round of talks after the two sides failed to reach a comprehensive agreement last month, missing a UN deadline of August 2.