ÖVP leader Sebastian Kurz, the new Chancellor, announced the new deal to waiting journalists on Friday evening.
Referring to the colours of the two parties, he said: “We can inform you that there is a turquoise-blue agreement.”
Kurz, the 31-year-old boy wunderkind leader of the conservative ÖVP, said on Thursday he expected a new government would be formed before Christmas.
More to follow.