Soldier killed in explosion near school in Yemen's Taiz
Escalating tensions came to a boil in April when pro-STC forces seized all key government and military locations on Socotra island, declared self-administrative authority, and appointed its own acting governor.
But a breakthrough was made last week after Yemeni separatists abandoned their declaration of self-rule in the south on Wednesday and pledged to implement a stalled Saudi-brokered peace deal, mending a rift between allies in the war against Houthi rebels.
The STC "announces that it is abandoning its self-rule declaration" to allow the implementation of a power-sharing deal known as the Riyadh Agreement, spokesman Nizar Haitham wrote on Twitter.
He acknowledged the announcement came after Saudi Arabia and the United Arab Emirates exerted pressure to row back on their decision.
Saudi Arabia said it had proposed a plan to "accelerate" the implementation of the Riyadh Agreement, the official Saudi Press Agency (SPA) reported early Wednesday.
The plan calls for the Yemeni prime minister to form a new government within 30 days, as well as the appointment of a new governor and security director for second city Aden where the government had set up base.
Yemen's internationally recognised government welcomed the announcement, with spokesman Rajeh Badi expressing hope that this would be a "serious and true start" to implementing the Riyadh Agreement.
Yemeni President Abedrabbo Mansour Hadi, exiled in Riyadh, separately announced the appointment of a new police commander and governor for Aden.
If it holds, the breakthrough should allow the Saudi-led coalition and its allies to refocus their energies on the war against their common foe - the Houthi rebels.
More than 100,000 people, mostly civilians, have been killed and millions displaced in what the United Nations has called the world's worst humanitarian disaster.
The Arab world's poorest country, already devastated by conflict and malnutrition, also faces the coronavirus pandemic that its decrepit health system is ill-equipped to handle.