The Caspian Sea holds vast amounts of oil and natural gas.
Russia, Iran, Kazakhstan, Turkmenistan and Azerbaijan say the bulk of the waters will be considered as a common resource and that the Caspian will given a special status that is neither that of a sea or a lake.
"The convention stipulates that all legal issues of the Caspian Sea are operational and applicable only through the consensus of the five countries, which is very important and fundamental", he said.
This is because the Caspian has many defining characteristics of a lake: it is surrounded by land and has no outflowing rivers.
Addressing a meeting of the Caspian Sea states' foreign ministers on Saturday night, Zarif said the convention on the sea's legal status would be a very important step, which would put an end to 21 years of negotiations.
If deemed a sea, the five countries would draw lines extending from their shores to the midway point with littoral neighbors, while classifying it as a lake would mean the resources would be divided equally among those five countries.
However, there was little detail about provisions on splitting the seabed.
His Iranian counterpart, Hassan Rohani, said that the delimitation of oil- and gas-rich Caspian seabed will require additional agreements between littoral states.
One of the reasons the Caspian has been so hotly contested is its abundance of oil and gas reserves.
At stake are resources including trillions of dollars' worth of hydrocarbons in the seabed, which holds about 50 billion barrels of oil and almost 9 trillion cubic meters of natural gas in proven or probable reserves.
Some countries have tried to develop the disputed fields while at times using warships to scare off contractors hired by other sides.
The Caspian Sea is the largest enclosed body of water by area and is variously classified as the world's largest lake or a full-fledged sea. Kazakh President Nursultan Nazarbayev said on Sunday that the recent agreement allowed the setting of national quotas for fishing.
But it remained unclear to observers whether the convention adopted yesterday would definitely clear a way for the pipeline, and no future dates for further discussion were set, beyond an agreement to cooperate.