German Chancellor Angela Merkel has welcomed the coalition deal and says "it's important that we start quickly with our work".
Ms Merkel was speaking a day after the centre-left Social Democrats voted overwhelmingly to remain in a coalition with her conservative bloc, giving the chancellor the support needed to preserve her governing coalition and secure a fourth term as leader of Europe's most powerful economy.
Parliament is expected to meet on March 14 to re-elect Ms Merkel as chancellor, ending the longest time Germany has been without a new government after elections in its post-war history.
The Social Democrats were initially reluctant to extend their coalition with Ms Merkel, but eventually agreed to a deal that gives them control of the foreign, labour and finance ministries - three major portfolios - in return for supporting curbs on immigration.
VIDEO: Germany's second biggest party (SPD) approves a plan to join Chancellor Angela Merkel's coalition, clearing the last hurdle in the way of the veteran leader's fourth term. #GroKo pic.twitter.com/UUQv4bJcgb— AFP news agency (@AFP) March 4, 2018
-Press Association and Digital Desk