Sweden's outgoing coalition of Social Democrats and Greens said Friday they would form a minority coalition with centrist backing to end months of post-poll gridlock.
In an attempt to end the impasse after last September's inconclusive election the two coalition partners said the Liberals and the Centre Party had agreed to offer support.
The four parties indicated they had reached an agreement by publishing a 15-page policy document on their respective websites.
"By dint of the accord, the Centre and the Liberals accept that (Social Democrat outgoing Prime Minister) Stefan Lofven be prime minister in a government composed of Social Democrats and the Greens," the text stated.
The Liberals and the Centre Party, until now part of a four-party alliance with conservatives, must still obtain the approval of their respective party bases to back the government.
The accord comes after tough horse trading with the Centre Party notably demanding the government give ground on labour market reforms and deregulate rental policy.
"In this kind of negotiation you have to know how to give and take," Centre Party leader Annie Loof told a news conference.
The Greens have meanwhile obtained a key demand, namely replacing a tax on air tickets with one on fuel.
With migration a hot social issue, migrants will in future also have to take a test on their knowledge of Swedish language and culture.
A revamped coalition would hold 167 seats in the 349-seat single chamber parliament, eight short of a minority.
Under Sweden's political system, a government can operate as long as a majority of lawmakers do not vote it down.
In Sweden, the speaker has four attempts -- two of which have already passed -- to task a candidate with forming a government that parliament will accept or else new elections must be held.
The speaker is due to meet with party leaders on Monday and then propose a candidate for prime minister ahead of a vote set for Wednesday.
The speaker has tasked both Lofven and conservative leader Ulf Kristersson with trying to form a workable coalition team.
Neither side will accept support from the far-right, anti-immigration Sweden Democrats. With 62 seats, it is now the third-largest party in the Riksdag.
The centre-right and far-right together brought down Lofven's previous administration in a no-confidence vote at the end of September, although he has stayed on as caretaker prime minister.