Dozens of buses transported rebel fighters and their relatives out of Khan al-Shih, about 25 kilometres (15 miles) southwest of the Syrian capital, late Monday, the Syrian Observatory for Human Rights said.
"Vehicles holding at least 1,200 people, as well as about 30 ambulances carrying wounded people, reached Idlib on Tuesday morning," Observatory head Rami Abdel Rahman said.
The evacuation came after local rebel groups and Syrian authorities struck a deal that would see Khan al-Shih brought back under government control in exchange for an end to a siege by regime forces.
Khan al-Shih is the fifth opposition-held town in three months to be evacuated, after Daraya, Moadamiyat al-Sham, Qudsaya, and al-Hama.
The regime has touted such "local reconciliation" agreements as a way to bring an end to country's nearly six-year civil war.
Khan al-Shih was the last rebel bastion southwest of Damascus and was used by anti-government fighters to dispatch reinforcements to the capital's suburbs from southern Syria.
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Abdel Rahman said more people were expected to be evacuated in the coming days.
An AFP journalist saw dozens of men, women, and children arriving at a camp for displaced people in northwest Idlib on Tuesday.
Aid workers pushed wounded individuals in wheelchairs into large white tents and helped others carry duffel bags and suitcases inside.
Fateh Awwad, who heads the local office of the Saaed (Help) charity, said as many as 1,700 people from Khan al-Shih reached the camp on Tuesday.
"Today, we're welcoming people coming from Khan al-Shih... We've prepared the camp with everything, but as the number (of displaced people) is growing, we're missing some goods," said Awwad.
Since it erupted in March 2011, Syria's conflict has displaced more than half of the country's pre-war population.
An estimated five million have fled to neighbouring countries, but millions more have sought refuge in internal displacement camps.