The accord was signed in June, just over two years after the Roman Catholic Church recognised the Palestinian territories as a sovereign state in February 2013.
The accord covers the operation of the Church in areas of the Holy Land under Palestinian control but its significance has been seen in broader terms as a symbol of growing international backing for a Palestinian state.
"With reference to the Comprehensive Agreement between the Holy See and the State of Palestine, signed on 26 June 2015, the Holy See and the State of Palestine have notified each other that the procedural requirements for its entry into force have been fulfilled," a Vatican statement said.
"The agreement... regards essential aspects of the life and activity of the Church in Palestine, while at the same time reaffirming the support for a negotiated and peaceful solution to the conflict in the region."
In June, the Vatican hailed the agreement, which includes provisions to protect the rights of Christians, as a model for other Arab and Muslim states in their relations with Christian minorities facing increasing persecution in the Middle East.
Israel attacked the accord as premature and counterproductive to efforts to get the Palestinians to resume direct negotiations with the Jewish state.
The Vatican's recognition of the state of Palestine -- joining dozens of others -- followed a November 2012 vote in favour of recognition by the UN General Assembly.
The Church has had diplomatic relations with Israel since 1993 but has yet to conclude an agreement on Christian rights there. Negotiations on the subject have been running since 1999 but have repeatedly run into deadlock over the status of Jerusalem.