The United Nations presided over the deal, which the mayor of Homs said involved 300 militants and 400 members of their families leaving Waer, the last militant-held area of the city that has been a center of the fighting against Syrian President Bashar al-Assad.
The Observatory said about 750 people had left, including terrorists from the al Qaeda-linked Nusra Front.
Four buses arrived in Idlib overnight out of a total of around 15 that left Homs, with others still on their way, Observatory director Rami Abdulrahman said, Reuters reported.
Some diplomats say local ceasefires may be the most effective way of gradually bringing peace to Syria, where more than 250,000 people have been killed during nearly five years of conflict.
A diplomat who tracks Syria said there could be more local ceasefires. The United States has said they could happen more frequently, after world powers called for a nationwide truce to halt Syria's civil war.