Bulgarian President Georgi Parvanov endorsed a cabinet list approved by the leaders of Bulgaria's three main political parties.
The agreement ends a two monthlong political stalemate that had jeopardized this Balkan country's aspirations to join the European Union in 2007.
Bulgaria's election-winning Socialist Party had completed earlier in the day a deal with the National Movement Simeon II and a mainly ethnic Turkish party to form a coalition government.
Socialist leader and premier-designate Sergei Stanishev will present the cabinet nominations for parliament approval on Tuesday. The vote is likely to succeed as the three-party coalition holds 169 of the legislature's 240 seats.
"The new government's top priorities will be European integration, social responsibility and economic growth," Stanishev said.
Key posts in the future center-left government, including the ministers of finance, of defense, of justice, European integration and of public administration are scheduled to be taken by western-oriented reformists.
"Today we have sent a good sign to Europe. It is important for Brussels to see that there is continuity in Bulgaria," outgoing Prime Minister Simeon Saxcoburggotski said after the signing ceremony for the new coalition.
The June 25 general election in Bulgaria produced a fragmented legislature of seven parties, and none of them won an outright majority.
The Socialist Party holds 82 seats, Saxcoburggotski's party has 53 seats and the small Turkish party 34.
The new government will have the strong support in parliament needed to push through the laws required by the EU before the end of September, when the European Commission is scheduled to issue a report on Bulgaria's readiness for membership.
The European Union has warned Bulgaria to quickly implement key reforms, or its membership could be delayed by a year, the AP reports.