Some cars waved Lebanese flags, others honked, and one woman could be seen flashing the victory sign with her fingers.
Many of the villages the people were likely returning to have been destroyed. But displaced families renting out alternative housing have been under financial pressure and hoped to having avoid paying another month of rent, some of them told Reuters.
Some displaced people said they were still nervous about returning.
Hussam Arrout, a father of four who said he was displaced from Beirut's southern suburbs and was originally from the southern border village of Mays al-Jabal, said he was itching to get to his ancestral home.
"The Israelis haven't withdrawn in full, they're still on the edge. So we decided to wait until the army announces that we can go in. Then we'll turn the cars on immediately and go to the village," he said.
Biden spoke at the White House on Tuesday shortly after Israel's security cabinet approved the
agreement in a 10-1 vote. He said he had spoken to Israeli Prime Minister Benjamin Netanyahu and Lebanon's caretaker Prime Minister Najib Mikati, and that fighting would end at 4 a.m. local time (0200 GMT).
"This is designed to be a permanent cessation of hostilities," Biden said. "What is left of Hezbollah and other terrorist organizations will not be allowed to threaten the security of Israel again."
Israel will gradually withdraw its forces over 60 days as Lebanon's army takes control of territory near its border with Israel to ensure that Hezbollah does not rebuild its infrastructure there, Biden said.
"Civilians on both sides will soon be able to safely return to their communities," he said.
Hezbollah has not formally commented on the ceasefire but senior official Hassan Fadlallah told Lebanon's Al Jadeed TV that while it supported the extension of the Lebanese state’s authority, the group would emerge from the war stronger.
"Thousands will join the resistance ... Disarming the resistance was an Israeli proposal that fell through," said Fadlallah, who is also a member of Lebanon's parliament.
Iran, which backs Hezbollah, the Palestinian group Hamas as well as the Houthi rebels that have attacked Israel from Yemen, said it welcomed the ceasefire.
French President Emmanuel Macron said on social-media platform X the deal was “the culmination of efforts undertaken for many months with the Israeli and Lebanese authorities, in close collaboration with the United States.”
Lebanon's Mikati issued a statement welcoming the deal. Foreign Minister Abdallah Bou Habib said the Lebanese army would have at least 5,000 troops deployed in southern Lebanon as Israeli troops withdrew.
Netanyahu said he was ready to implement a ceasefire but would respond forcefully to any violation by Hezbollah.
He said the ceasefire would allow Israel to focus on the threat from Iran, give the army an opportunity to rest and replenish supplies, and isolate Hamas, the Islamist militant group that triggered war in the region when it attacked Israel from Gaza last year.
'SET IT BACK DECADES'
"In full coordination with the United States, we retain complete military freedom of action. Should Hezbollah violate the agreement or attempt to rearm, we will strike decisively," Netanyahu said.
Hezbollah, which is allied to Hamas, was considerably weaker than it had been at the start of the conflict, he added.
"We have set it back decades, eliminated ... its top leaders, destroyed most of its rockets and missiles, neutralized thousands of fighters, and obliterated years of terror infrastructure near our border," he said.
A senior U.S. official, briefing reporters on condition of anonymity, said the U.S. and France would join a mechanism with the UNIFIL peacekeeping force that would work with Lebanon's army to deter potential violations of the ceasefire. U.S. combat forces would not be deployed, the official said.
In the hours leading up to the ceasefire, hostilities raged as Israel ramped up its campaign of airstrikes in Beirut and other parts of Lebanon, with health authorities reporting at least 18 killed.
The Israeli military said it struck "components of Hezbollah's financial management and systems" including a money-exchange office. Hezbollah also kept up rocket fire into Israel in the final hours.