The new agreement was announced during the first official trip of South African President Cyril Ramaphosa to Kenya.
The presidents of South Africa and Kenya say they have resolved a longstanding visa dispute and Kenyans will be able to visit South Africa visa-free for up to 90 days in a calendar year.
South Africans already get free visas on arrival in Kenya, while Kenyans were charged and required to provide proof of sufficient funds and return flight tickets.
The new agreement, which is set to take effect on January 1, was announced during the first official trip of South African President Cyril Ramaphosa to Kenya on Wednesday.
Meanwhile, he and his Kenyan counterpart William Ruto also directed their trade ministers to address barriers that limit trade between the two countries, which are among the strongest economies in Africa.
The duo also praised the Ethiopia peace agreement signed last week in South Africa and brokered by the African Union.
They appealed to the parties to “ensure full implementation of the agreement to reach a lasting political settlement”.
Representatives of the Ethiopian federal government and regional authorities in Tigray are meeting in Nairobi this week to hash out details of the agreement brokered by AU mediators led by former Nigerian President Olusegun Obasanjo. Ruto’s predecessor Uhuru Kenyatta was among the mediators.