Spain's Socialists and the far-left Unidas Podemos ("United We Can") party on Tuesday (local time) agreed to form a coalition government, just two days after a parliamentary election delivered a highly fragmented parliament.
The deal - albeit a preliminary agreement - still needs cabinet positions to be divided up between the two parties, who recently refused to work together, and also still needs the support of smaller parties, Al Jazeera.
Sunday's election, the country's fourth poll in four years, has left the Spsh parliament even more fragmented than a previous ballot in April, with the Spsh Socialist Workers' Party (PSOE) retaining its lead, but drifting even further away from a majority.
"It's a deal for four years," Socialist leader Pedro Sanchez, who is currently acting prime minister, said after signing the pact, alongside Podemos leader Pablo Iglesias.
The Socialists' 120 seats, combined with the 35 won by Unidas Podemos, still leave them short of a majority in the 350-seat parliament.
"Spain needs a stable government, a solid government," Sanchez said, adding they would call on other parties to join the deal.
If they succeed, it would be Spain's first coalition government since the country's return to democracy in the late 1970s.
The Socialists and Podemos had tried and failed to form a coalition government after the April election, prompting Sanchez to call the repeat ballot.
The two had been at odds for months, with party leaders exchanging harsh words as the acrimonious talks collapsed until Tuesday.
However, Pablo Casado, leader of Spain's conservative People's Party (PP) has criticised the agreement and called for Sanchez's resignation.
"A radical government is exactly the opposite of what Spain needs right now," he was quoted as saying.
( With inputs from ANI )