September's deal came after months of talks led by South Africa's Thabo Mbeki
Zimbabwe opposition leader Morgan Tsvangirai has agreed to join a unity government with President Robert Mugabe.
The move ends months of political stalemate as the two sides squabbled over the details of a power-sharing deal agreed last September.
It comes as Zimbabwe deals with Africa's worst cholera epidemic in 15 years and thousands face hunger, and follows the collapse of the currency.
What has been agreed?
Mr Tsvangirai's Movement for Democratic Change (MDC) has agreed to join the unity government.
He is due to be sworn in as prime minister on 11 February under a timetable proposed by the Southern African Development Community (SADC), which has been mediating on the issue.
The two sides are setting up a joint committee to monitor the power-sharing agreement.
The move requires a leap of faith by the MDC which has no trust in President Mugabe, but it was the only realistic option short of abandoning the idea of a unity government, the BBC's Peter Biles says.
Mr Tsvangirai said the party would formally put its "outstanding issues" to SADC before the swearing-in ceremony.
What was in the September 2008 deal?
Mr Tsvangirai becomes prime minister and heads a new council of ministers, while Mr Mugabe continues to chair cabinet meetings.
Control of the security forces was one of the key questions during the negotiations, as the MDC accused them of leading attacks on their supporters ahead of last June's election.
Zanu-PF has control of the ministries of defence and state security, so the MDC wanted home affairs, which runs the police.
Mr Mugabe at first refused, but in the end agreed to have one minister from each side.
Mr Mugabe also gave his party other key cabinet posts, but reportedly agreed to let the MDC have the finance portfolio.
The MDC had wanted Mr Mugabe to step down and a transitional authority set up to organise new, internationally supervised elections, which it thinks it would win.
How important is the deal?
The idea is for both sides to work together to rebuild the country, shattered by political violence and economic meltdown.
Donors have said they are ready to put money into Zimbabwe, as long as the MDC has a real say in government.
But it may be difficult for the bitter enemies to work together.
At the signing ceremony in September, both men were relatively conciliatory, but relations then worsened.
One MDC MP points out that most of the party's new ministers have been "brutalized" in recent years - the MDC says on the orders of Zanu-PF ministers, with whom they are now supposed to work.
Until now, Mr Mugabe has normally referred to Mr Tsvangirai as a "traitor" or a "Western puppet" - accusing him of working for the former colonial power, Britain.
What would have happened without a deal?
Mr Mugabe could well have formed a government on his own.
But this would not have helped the dire situation in Zimbabwe, as international donors and business will not put money in while Mr Mugabe remains in sole charge.
Zimbabwe was once one of the most diversified countries in Africa, but is now in ruins.
Many Zimbabweans struggle to eke out a living
This week, the acting finance minister agreed to allow Zimbabweans to conduct business in currencies other than the Zimbabwe dollar, in a bid to stem runaway inflation.
The inflation rate of 231,000,000% means that prices change by the hour, making it almost impossible for businesses to make any plans. Many have collapsed.
Public sector employees have been refusing to work because they say their salaries are worthless.
This has had a profound effect on the cholera epidemic that is sweeping the country.
The World Health Organization says the number of people infected is now more than 60,000, a figure they had called their "worst case scenario". More than 3,000 people have died from the disease.
There are shortages of many goods, and it is predicted that half the population will need food aid by the end of the year.
Another key question that still has to be addressed is land.
President Mugabe has overseen the seizure of most of Zimbabwe's white-owned land since 2000.
The white farmers will no doubt be hoping they can get their land back, but many of the farms have been given to allies of Mr Mugabe, who will be reluctant to let go of them.
Why did they agree to talk?
Both sides came under heavy international pressure to find a solution to Zimbabwe's crisis.
Furthermore, the economic collapse made Mr Mugabe and his allies realise that something had to change.
Mr Mugabe and his Zanu-PF control the security forces, which were accused of organising a campaign of violence against the opposition.
The MDC had been warned that it could be "wiped out" if it refused to talk.
Many of its newly-elected MPs and councillors had fled their homes, after being attacked by Zanu-PF militias.
The final push came when the African Union and United Nations agreed to help former South African President Thabo Mbeki with the mediation effort.
The MDC had accused Mr Mbeki of being too soft on Mr Mugabe but agreed to take part in talks after the AU and UN joined the process.
What happened in last year's election?
In the first round in March, Mr Tsvangirai gained more votes than Mr Mugabe.
But election officials say neither candidate gained the 50% needed for victory, so a run-off was held in June.
Ahead of this, there were numerous, credible reports of systematic attacks against MDC activists.
About 200 were killed, 5,000 abducted and 200,000 forced from their homes, the opposition said.
Zanu-PF said the scale of the violence was exaggerated and blamed much of it on the MDC.
Mr Mugabe said "only God" could remove him from power.
This led Mr Tsvangirai to pull out of the run-off.
He said he wanted to save the lives of his supporters and that if Mr Mugabe would not accept defeat, there was no point in taking part in a sham election.
There were also parliamentary elections in March, in which the MDC won a majority.
But the presidency is a far more powerful institution.