Under the coalition agreement, Romania will rotate its prime minister every 18 months before the next parliamentary elections.
Romanian MPs have approved a new grand coalition government on Thursday, ending a months-long political crisis.
They voted overwhelmingly in favour of an executive led by a former army general and defence minister Nicolae Ciucă.
Ciucă's centre-right National Liberal Party (PNL) and the Social Democrat Party (PSD) -- the two biggest parties in Romania's parliament -- will form an unlikely partnership, alongside the small ethnic Hungarian party UDMR. Together, the three parties control around two-thirds of the 466-seat legislature.
The new coalition agreement also means that the role of the prime minister will rotate after 18 months.
Ciucă is set to lead the new government before handing over to a PSD premier before the next parliamentary elections in 2024.
Romanian President Klaus Iohannis will swear in the new government later on Thursday.
Ciucă -- who served in both Afghanistan and Iraq -- said members of the coalition would set aside pride and political differences in “the interest of Romanians.”
"We who are in front of you today have gone through things that separate us and we have found things that unite us," Ciucă said.
"We are determined to put an end to the tense situation we are going through."
Social Democrat Party leader Marcel Ciolacu acknowledged rising energy prices and noted that Romania has been hard-hit by the COVID-19 pandemic.
“It’s time to prove to Romanians that they can have a government that works for them,” he told reporters.
Romania was plunged into political turmoil when former PNL Prime Minister Florin Cîțu was ousted in a no-confidence vote after sacking a junior minister.
Cîțu's coalition partners had expressed transparency concerns about a regional development fund and had quit the coalition in September.