Under the deal, murder charges against the two were dismissed and each is to be sentenced to 16 months to five years in prison. Fines also could be imposed at their sentencing Jan. 26.
Joseph T. LePore pleaded guilty to third-degree arson, third-degree tampering, a disorderly persons offense and resisting arrest.
Sean Ryan pleaded guilty to third-degree arson and third-degree witness tampering.
The two had ignited a banner in a third-floor lounge of their dormitory, which set a couch ablaze at the Roman Catholic school in South Orange. Three students were overcome by the smoke and died, and dozens of others were injured trying to escape.
For years, LePore and Ryan denied starting the Jan. 19, 2000, fire, but on Wednesday, they acknowledged their involvement.
"I did not intend to harm anyone. It was a prank that got out of hand," Ryan said.
The deadly fire led New Jersey to enact the nation's first mandatory dormitory sprinkler law, requiring the devices at all residential colleges and boarding schools.
Ryan and LePore, both now 26 and longtime friends from Florham Park, each could have faced 30 years in prison if convicted of murder. Killed in the blaze were 18-year-olds Frank Caltabilota of West Long Branch, John Giunta of Vineland, and Aaron Karol of Green Brook.
Karol's father, Joseph Karol, thanked prosecutors for their dedication after the deals were struck but said little else as he left the courthouse.
"I'll have plenty to say at sentencing," he said.
After the pleas, defense lawyers said the deal was appropriate in part because the school did not have adequate systems to prevent the blaze from spreading.
"The intervening cause was Seton Hall's lack of response in preventing fires," said William DeMarco, LePore's lawyer. The attorney noted that fire hoses had been removed a week before the fire, staff had no fire training, and the dorms "were rife with false alarms."
"If they had fire suppression systems the fire would not have spread," DeMarco said.
The defendants did not speak to reporters. Their attorneys said the two felt terrible about what happened but, with sentencing pending, it was not the time to speak or express remorse.
Essex County Prosecutor Paula Dow said the plea bargain was fair, especially because the state's case depended on circumstantial evidence.
"We had no eyewitnesses, other than the defendants themselves, who could place the defendants at that location," she said.
Dow, who spoke to media with family members of the fire's victims behind her, said most of the families supported the deals but noted that some believed harsher punishment should have been obtained.