The reconciliation in the larger interests of the Indonesian football was inked after two days of extensive discussions by all the parties
The two sides signed a Memorandum of Understanding (MoU) on Thursday after an Asian Football Confederation (AFC) Task Force was formed to help mediate the talks between the groups in May.
As part of the MoU, the PSSI will establish a joint comittee to create a new top-tier professional football league and cooperate with Fifa and AFC to review statutes and other association matters.
Furthermore, four previously expelled PSSI Executive Committee members will be reinstated; it was also stated that the ISL will continue to operate separately but will eventually come under PSSI. Additionally, the KPSI will be no longer claim authority as the country's governing body in football matters.
AFC vice president Prince Abdullah Ibni Sultan Ahmad Shah, who led the Task Force team, revealed his excitement over this agreement.
"It was in the interest of Indonesian football and I would like to thank everyone and FIFA for entrusting AFC to lead this mission," he told assembled media after the signing took place.
"This is the start of a new chapter in Indonesian football and an opportunity to put personal differences and politics aside for the sake of football.
"We are confident that the MoU meets the requirements Fifa as all the football activities will be under the umbrella of PSSI."
Prince Abdullah stated that there will be a lot of work to be done in the future, but committed to help the development of Indonesian football.
"There is a lot of work ahead and AFC is willing to provide all the assistance to create a new top tier league in Indonesia."