Mutambara (l) had refused to back Tsvangirai (r) for the presidency
Zimbabwe's rival opposition factions say they have reunited, declaring they have a majority in parliament.
The announcement was jointly made by Movement for Democratic Change (MDC) leader Morgan Tsvangirai and Arthur Mutambara, whose faction split in 2005.
The final results of parliamentary and presidential polls have still not been published - more than four weeks after the elections.
Mr Tsvangirai says he beat President Robert Mugabe outright in the polls.
But independent monitors and Mr Mugabe's allies say that neither candidate passed the threshold of more than 50% of the vote required to be declared the president.
Representatives of the presidential candidates are set to meet the electoral commission to review the results of the disputed presidential election - officials say these will be released when the rival candidates agree on them.
At a joint news conference in Johannesburg, South Africa, Mr Tsvangirai and Mr Mutambara announced that they were now working together.
This meant that President Mugabe's Zanu-PF party was now in the minority, they said.
"Mugabe should concede that he cannot be president without controlling the parliament," Mr Tsvangirai said.
"The old man must go and have an honourable exit."
The opposition announcement is a significant move, the BBC's Peter Greste in Johannesburg says.
Over the weekend, the Zimbabwe Electoral Commission released the results of recounts in 18 seats, which confirmed that Mr Mugabe's Zanu-PF party has lost its parliamentary majority for the first time since independence in 1980.
A judge has ruled that the MDC activists should be charged, or freed
ZEC spokesman Utoile Silaigwana told Reuters news agency that the final five parliamentary results had been collated and would be published on Tuesday.
The original results showed that the combined opposition had 109 seats, against 97 for Zanu-PF.
In the presidential race, the Mutambara faction supported former Finance Minister Simba Makoni, who is estimated to have won about 8% of the vote.
Correspondents say that the MDC's reunification would make it harder for Mr Mugabe to win any run-off, although Mr Tsvangirai says he would not take part.
He says the delay is intended to give Mr Mugabe's supporters time to intimidate opposition supporters in rural areas.
This is strongly denied by Zanu-PF officials, who accuse the opposition of exaggerating the scale of the violence.
The MDC had predicted that the recount of 23 parliamentary results would be fixed in order to let Zanu-PF retain its majority.
Zanu-PF spokesman Bright Matonga said the results showed that Zimbabwe's electoral system was "transparent".
The MDC says 15 of its supporters have been killed since the elections.
More than 200 of its activists were arrested during a police raid on its Harare headquarters last Friday.
A judge has ordered that they should either be charged or set free, following an MDC petition.
The police said they were looking for suspects involved in attacks on ruling party supporters but the MDC said those arrested had fled their homes after being victims of attacks.