With Cleon and Brasidas dead and with the war in the north over, negotiations for a more lasting peace than the one year’s truce began. The negotiations went on for the winter of 422 to 421, and the Peace of Nicias, named after the chief Athenian negotiator, was sworn early in 421. Thucydides cites the text verbatim (Thuc. V 18-19).
Its chief terms were that the Lacedaemonians should return Amphipolis to the Athenians while the Athenians should return all Lacedaemonian prisoners (with a corresponding return by the Lacedaemonians of any Athenian prisoners). Specific arrangements were made for the cities in the Chalcidice which had rebelled against Athens: Argilus, Stageirus, Acanthus, Scolus, Olynthus, and Spartolus were to pay the tribute (as fixed in the year 477), but be neutral. They could, however, become allies of Athens again at their own desire. In all of these cities (including Amphipolis) all inhabitants retained the right to leave with their (movable) property. The Athenians, however, had a free hand in any city on the Chalcidice which they already held (including Torone and Scione). Finally, the Athenians were to return to Sparta Pylos (called Coryphasium in the treaty; including, obviously, Sphacteria), Cythera, and various other places.
Lots were cast to see which side would begin the exchange of places and prisoners, and Sparta was chosen. At this point it became clear that neither side had reckoned with the host. The Amphipolitans refused to leave - and declined to be handed over to Athens. And the Lacedaemonian commander after Brasi-das’ death, Clearidas, would not use force (Thuc. V 21), quite possibly because it was not a realistic option. Without Amphipolis, Athens would not hand over the 120 Spartiates.
So the Lacedaemonians renewed negotiations. Up until now they had been negotiating on behalf of the Peloponnesian League as well; this time they negotiated behind their allies’ backs and agreed to a treaty of alliance between themselves and the Athenians (Thuc. V 22; text of treaty 23-24). News of the alliance sent shockwaves throughout the Peloponnesian League, and a number of members, most prominently Corinth, left it (Thuc. V 27). But the Athenians, while they held on to Pylos (including Sphacteria), Cythera, and the other places until such time as they should receive Amphipolis, did release the 120 Spartiates. With this the first phase of the Peloponnesian War ended (Thuc. V 24).