The Saudi-led coalition is to suspend bombardment of rebels in Yemen for five days, so aid can reach civilians.
The truce will come into force from midnight on Sunday, according to the official Saudi news agency.
However, the coalition said it reserved the right to respond to "military activity or movement" by Houthi rebels during the ceasefire.
The announcement followed air strikes in Taiz province, which reportedly killed 120 people, including civilians.
Missiles fired by coalition forces hit a residential area in the Red Sea town of Mokha on Friday, flattening buildings, the Associated Press reports.
Children and elderly people, were among the dead.
"It just shows what is the trend now of the airstrikes from the coalition," said Hassan Boucenine from the medical charity Doctors Without Borders.
"Now, it's a house, it's a market, it's anything," he added.
A resident of Taiz, Abulkader Al Guneid, told the BBC that there were shortages of most basic necessities, including diesel and vegetables.
"We have power cut. We have internet cut. We have everything cut," he added.
Aid agencies say a blockade on Yemen has worsened the humanitarian crisis which is gripping the country.
More than 80% of Yemen's 25 million people now need some form of aid.
The Saudi-led coalition has been bombing Houthi militia and army forces loyal to former president Ali Abdullah Saleh since 26 March.
It aims to defeat the rebels, who now control most of the country, and restore the government of exiled President Abdrabbuh Mansour Hadi.
Saudi Arabia says the rebels are hiding troops and weapons in civilian areas to prevent them being targeted by air strikes.
But the UN has warned the coalition that indiscriminate bombing of populated areas is against international law.
The unexpected ceasefire was announced after President Hadi wrote to Saudi's King Salman asking for a break, to allow humanitarian supplies to be delivered.
A week-long truce brokered by the United Nations failed earlier this month.
At least 1,693 civilians have been killed in fighting in Yemen, with almost 4,000 people wounded. The UN said the majority of casualties were caused by air strikes.
Key players in the war
Houthis - The Zaidi Shia Muslim rebels from the north overran Sanaa last year and then expanded their control. They want to replace Mr Hadi, whose government they say is corrupt. The US alleges Iran is providing military assistance to the rebels.
Ali Abdullah Saleh - Military units loyal to the former president - forced to hand over power in 2011 after mass protests - are fighting alongside the Houthis.
Abdrabbuh Mansour Hadi - The president fled abroad in March as the rebels advanced on Aden, where he had taken refuge in February. Loyal soldiers, Sunni Muslim tribesmen and Southern separatists have formed militia to fight the rebels.
Saudi-led coalition - A US-backed coalition of nine, mostly Sunni Arab states says it is seeking to "defend the legitimate government" of Mr Hadi.
Al-Qaeda in the Arabian Peninsula - AQAP opposes both the Houthis and President Hadi. A rival affiliate of Islamic State has also recently emerged.