After talks at No 10 between Theresa May and DUP leader Arlene Foster, the pair hailed the agreement between the two parties.
Mrs Foster said she was "delighted" an arrangement had been agreed.
The Prime Minister said the DUP and the Tories "share many values" and the agreement was "a very good one".
The agreement was signed by Tory chief whip Gavin Williamson and the DUP's Sir Jeffrey Donaldson while Mrs May and Mrs Foster, along with Damian Green and Nigel Dodds, watched on.
Speaking in No 10, Mrs May said: "As we set out at the beginning of the talks, we share many values in terms of wanting to see prosperity across the UK, the value of the union, the important bond between the different parts of the United Kingdom.
"We very much want to see that protected and enhanced and we also share the desire to ensure a strong government, able to put through its programme and provide for issues like the Brexit negotiations, but also national security issues.
"So the agreement we have come to is a very, very good one, and look forward to working with you."
Mrs Foster said: "We're delighted that we have reached this agreement, which I think works, obviously, for national stability.
"In terms of the Northern Ireland Executive, of course we are determined to see it back in place as soon as possible as well, because we believe we need a strong voice for Northern Ireland when dealing not least with the Brexit issue."
Outside Downing Street, Mrs Foster said a £1.5 billion funding package for Northern Ireland has been secured as part of the deal.
The money will be used to boost the region's economy and invest in new infrastructure, health, education and other sectors, she said.
She added that the funding would "address the unique circumstances" of Northern Ireland and the impact on its people.
UK-wide, the pensions triple lock will also stay in place and there will be no means-testing of winter payments, under the arrangement.