Chancellor Angela Merkel’s conservatives and Germany’s main centre-left party have reached an agreement to form a new coalition government, according to the dpa news agency.
The breakthrough came after a final session of negotiations that dragged on for 24 hours, dpa said.
Citing unidentified party officials, dpa said Mrs Merkel’s Christian Democratic Union, its Bavaria-only sister party the Christian Social Union, and the centre-left Social Democrats overcame the last hurdles to a deal after previously achieving a breakthrough on the division of ministries.
According to dpa, the Social Democrats were set to get the foreign, labour and finance ministries — the latter a major prize, held by Mrs Merkel’s party for the past eight years.
Even once a deal emerges, it will not bring an immediate end to the political limbo following Germany’s September 24 election — the country has already broken its post-war record for the longest time from an election to the swearing-in of a new government.
A deal will be put to a ballot of the Social Democrats’ 460,000 members, a process that will take a few weeks.
Many members are sceptical after the party’s disastrous election result, which followed four years of a “grand coalition” with the party serving as junior partner to Mrs Merkel’s conservatives.
Failure to reach an agreement, or a rejection by Social Democrat members, would leave a minority government under Mrs Merkel or a new election as the only viable options.
Mrs Merkel’s attempt to put together a government with two smaller parties collapsed in November.
Social Democrat leader Martin Schulz, who had previously ruled out renewing the coalition of Germany’s biggest parties, then reversed course.