The re-alignment was announced by Pawan Kalyan and BJP's state chief Kanna Lakshminarayana in the presence of BJP's central leaders Sunil Deodhar and G.V.L. Narasimha Rao at a news conference in Vijayawada.
Pawan Kalyan said his talks with BJP leaders paved the way for alliance. He was confident both the parties would iron out their minor differences and work together.
The actor, who had held talks with BJP's working president J.P. Nadda and others in New Delhi early this week, exuded confidence that the alliance would come to power in the state in 2024.
He said they agreed to educate people on the failures of YSR Congress Party (YSRCP) government and the previous government of Telugu Desam Party (TDP).
The alliance was announced amid the ongoing protests by farmers in Amaravati over government's proposal to develop Visakhapatnam and Kurnool as two other capitals.
Both BJP and JSP have opposed shifting of the capital from Amaravati. "If the capital is shifted, we will not keep quiet," said the JSP leader.
Sunil Deodhar, who is in-charge of BJP affairs in the state, termed the alliance between the two parties as a historic development in Andhra Pradesh politics.
In the simultaneous elections held to state Assembly and Lok Sabha last year, BJP could not win a single seat while JSP bagged one Assembly seat. Pawan Kalyan himself lost from both the Assembly seats he had contested.
Pawan Kalyan had campaigned for BJP-TDP alliance in 2014. He later severed ties with both the parties over the issue of special category status. TDP had also snapped the ties with the BJP.
The three parties contested the previous elections on their own. TDP lost power with YSRCP led by Y.S. Jagan Mohan Reddy storming to power with a landslide majority, winning 151 seats in 175-member Assembly. The YSRCP also bagged 22 out of 25 Lok Sabha seats.
( With inputs from IANS )