On February 21, 1918, the German command on the Eastern Front presented a second ultimatum to Russia, demanding the withdrawal of Russian troops from Ukraine, Finland, Latvia, and Estonia. The ultimatum included a 48-hour deadline for troop withdrawal, followed by three days for the signing of a peace treaty and two weeks for ratification. The ultimatum specified the German claims to territories extending to the Narva River. On February 24, Russia accepted the conditions of the ultimatum, which forced its hand in relinquishing the Baltic provinces to German control.

The signing of the Brest-Litovsk treaty on March 3, 1918, marked a significant moment in the establishment of Estonia's sovereignty, as it demonstrated a retreat by Soviet Russia from its previous imperial ambitions in the Baltic region. This transition was not just a legal renunciation of claims but also set the stage for the later recognition of Estonia's independence and the eventual establishment of its government.

The implications of this treaty extended far beyond Estonia, showcasing the impact of World War I and the shifting dynamics of power in Eastern Europe. The agreement facilitated greater German influence in the region, which would have long-lasting effects on Baltic politics and interactions with other neighboring nations, especially during the aftermath of the war and the trajectory of the newly independent countries that emerged from it.