According to the International Law of the Sea, each country has an exclusive economic zone of 200 nautical miles (370.4 kilometres) off its coast. Where coastlines are closer than 400 miles, a median line is usually agreed upon as the boundary.

"With this agreement, the division of jurisdiction in the area is clarified," Norwegian Foreign Minister Jonas Gahr Stoere said in a statement.

"It will be a significant contribution to clarity and predictability in what comes to use of resources in the area." he said.

The Danish Foreign Ministry said the two countries had agreed to draw the boundary down the middle for some time but had been unable to do so before an accurate measurement of the coastlines.

Greenland is a self-governed Danish territory while the Svalbard islands are the northern most part of Norway. Several other disputes still exist in the Artic, an area thought to hold large hydrocarbon gas potential.