Sudan Monday quit the leadership of the African Union (AU) due to the Darfur region conflicts.
Alpha Oumar Konare, the AU's top diplomat, told reporters that Ghanaian President John Kufuor would now become chairman by consensus.
He said Sudan had supported the decision, avoiding a damaging dispute that could eclipse issues such as raising peacekeeping troops for Somalia.
Prior to the AU summit, predictions had been made that the Sudan issue would dominate the summit with only a late resolution.
Delegates at the summit said mediation by South African President Thabo Mbeki and a group of seven respected presidents or "wise men" resolved the dispute.
The 2007 chairmanship was promised to Sudanese President Omar al-Bashir a year ago since he had been passed over due to the Darfur violence, which has reportedly killed 200,000 people and driven 2.5 million from their homes.
Bashir has blocked the deployment of UN peacekeeping troops to bolster an African Union military mission of 7,000 soldiers and monitors.
Sudanese Foreign Minister Lama Kol said: "This was our suggestion. We voluntarily suggested this so that the foreign elements who were trying to divide the continent over this issue would not succeed ... what was important was to take the decision for the unity of the continent."
This was a sudden change of heart from Sudan, which had seemed adamant to hold onto the chairmanship prior to the summit.
As the summit began in the Ethiopian capital, Addis-Ababa, pressure rose to prevent Sudan from running an organization whose peacekeepers are charged with stemming the violence in the nation's vast west.
Further pressure was piled on after Chad, whose relations with Sudan have soured after the Darfur conflict spilled over their border, had vowed to withdraw from the AU if Bashir attained the chair.
(China Daily via Agencies January 30, 2007)