After the questioning of Sinclair, it became clear to Minbari they needed to end the battle and the war. But why did Minbari surrender to humans instead of accepting Earth's capitulation or simply signing a truce?
The reason behind the surrender of the Minbari fleet at the Battle of the Line is one of the major story arcs in both the first and second seasons of Babylon 5.
Assuming you're familiar with the reasons why the Minbari wanted to end the war...
(e.g. in the final moments of the Earth-Minbari War, the Grey Council used a Triluminary as they attempted to interrogate Sinclair, whom they had captured. The Triluminary glowed brightly, indicating that Sinclair had Valen's DNA so the Council assumed that Sinclair had Valen's soul and was the reincarnation of Valen himself (not knowing that Sinclair was in fact Valen himself, prior to the events that sent him into the past). The Council thus called an immediate halt to the war, since the fact that Minbari souls were being born in human bodies would mean that Minbari were effectively killing each other - a concept abhorrent to all Minbari.
...then the question can be answered. The Minbari had three choices;
- Accepting Earth's Surrender; This would have likely resulted in some sort of occupation or, at the very least the Minbari military caste would have insisted that the Humans cease building warships and withdraw from any expansion or colonisation.
- Simply disengaging from battle; This would have resulted in the continued prosecution of violence whenever human spaceships came into contact with Minbari spaceships or
- Minbari surrender. This resulted in reparations being paid to the Humans (in the form of support for Babylon Project) as well as the Minbari allowing the humans to continue their military R+D, exploration + expansion and allowing a subtle shift of technology from the Minbari to the Humans.
Since the Minbari 'Grey Council' are acutely aware of the prophecy about the coming "Shadow War" and the need for all Minbari to take an active role, crippling the Human race's ability to take part suddenly made no sense. On top of that, they can't risk the war flaring up due to another misunderstanding since it is forbidden for Minbari to attack other Minbari.
A surrender was the only option.
This is revealed in the series as well as in the feature movie In the Beginning. (Actually the reason not to watch it before you're through season 3. There are other minor spoilers for season 4 as well, but those aren't that huge.)
More or less by accident during an interrogation the Minbari notice that Sinclair has the soul of Valen; that humans possess the souls of Minbari (and in this case not just some random Minbari after all!). Due to the law demanding that no Minbari shall kill another Minbari, they immediately surrender to uphold their ideals without having to tell anyone.
As for "why a surrender?":
The actual "problem" here has been the fact, that the whole incident and the truth behind it (humans with Minbari souls) has been kept a secret by the religious caste, even inside the Minbari society. The warrior caste never really accepted nor understood the sudden surrender either and there are multiple occassions throughout the early seasons where Minbari soldiers clearly distrust Sinclair (and later Sheridan; especially for him being the "Star-Killer"). There are also several attempts by Minbari soldiers to create distrust between human and Minbari just for the sake of creating another conflict and continue the war.
All of the other answers give a good background and but I feel the most pointed answer is that
once the Minbari Grey Council knew that Humans had Minbari souls their Ape Shall Never Kill Ape law (set down by Valen - himself a "Minbari not of Minbari") kicked in.
... and also the whole Prophecy thing too :)
Also, as further support of the Surrender option, please remember that during the Battle of the Line when Ambassador Kosh was aboard a Minbari ship stated that "the humans are they key." So surrender was the only option for the Grey Council knowing of the coming Shadow War.
The humans were not even considering surrender. The Line was the last line of defense for Earth. Humans had taken on a "do or die" attitude and would not have surrendered to the invading Minbari.
The only way to stop the killing was for the Minbari to take the first step back. To simply stop firing on earth ships (without a formal call of surrender) would not have been possible without some kind of explanation as to why the order to cease fire went out. Surrender was that "explanation".
Edited to add...
After Richard's correction to my initial post, I think that although I have no actual supportive references, a plausible reason for the surrender is that the order to kill all humans was given by Delenn, a Grey Council leader for the Religious Cast. Since the Minbari believed in honor so much (and the Religious Cast being so pious in that regard), it makes sense to me that Delenn would convince the Minbari Grey Council to surrender as a matter of honoring the mistake made by giving the extermination order in the first place.