The two chief ministers' meeting at the mini-secretariat in Siliguri on Friday finally marked an end to the breach of relations after Mr Chamling had openly declared his support for a separate state of Gorkhaland last year.
Last June, Mr Chamling had written to Union home minister Rajnath Singh backing the Gorkhaland demand and in turn the West Bengal government too had written to Mr Singh, protesting against his support.
The Supreme Court had on Friday dismissed former Gorkha Janmukti Morcha leader Bimal Gurung's plea seeking protection from arrest in several cases lodged against him in West Bengal and for an independent probe into the alleged killings of Gorkhaland supporters in the state. When viewed together with the Sikkim resolve, political analysts are calling it a "double victory" for Ms Banerjee.
West Bengal had cancelled permits of commercial vehicles from Sikkim triggering the meeting between the two leaders, sources added.
At a joint press conference the leaders said the differences that arose between them during the disturbances in Darjeeling last year were a matter of the past.
Both leaders promised to work together on developmental issues and invited each other to their respective states.
"Because of their strategic locations, both Darjeeling and Sikkim need peace and development for growth and prosperity," Ms Banerjee said.
The meeting is also seen as a political setback for BJP since the party was wooing Pawan Chamling to officially join the NDA. Mr Chamling had earlier attended a meeting of BJP's North-east political platform Northeast Democratic Alliance (NEDA).
This is another major success for Mamata Banerjee since both states were at loggerheads for the past year and Chamling was seen getting aligned to the BJP.
One of the prime reasons for Mamata Banerjee behind burying the hatchet is the sizeable Gorkha population in Sikkim. Taking them into confidence can help her manage the Darjeeling hills better, official sources add.
The Darjeeling turmoil had strained the relations between West Bengal and Sikkim and had resulted in heavy losses to tourism and transport sector in the last financial year.