The three main pro-Western parties in Ukraine have formally announced that they will govern together.
The Orange Revolution leaders are to team up again
"The coalition of democratic forces... has been created," said Yulia Tymoshenko, who will return as PM.
She helped lead the 2004 Orange Revolution but was sacked as prime minister last year after a split with President Viktor Yushchenko's aides.
It has taken three months of often bitter negotiations and infighting for the parties to reach an agreement.
Ms Tymoshenko's party will now join forces with President Yushchenko's Our Ukraine party and the Socialists. Together they have 243 seats in the 450-seat parliament.
Ms Tymoshenko announced the deal at a parliament session televised live.
Review of gas deal
Shortly after announcing the coalition deal, she said the controversial gas deal with Russia would be reconsidered.
"I think all issues on gas supplies to Ukraine now require further deep revision and review," she told reporters.
Ukraine agreed to double its payments to Russia for gas after Moscow switched off its supplies for three days on 1 January, demanding a four-fold hike.
Our Ukraine emerged as the second strongest "Orange" party after the election in March - behind the Tymoshenko bloc but ahead of the Socialists.
The liberal leaders were beaten in the election by the pro-Russian opposition, led by Viktor Yanukovych, who was Mr Yushchenko's rival during the Orange Revolution.
But Mr Yanukovych's Party of the Regions did not get enough seats to form a government on its own.
Coalition talks proved so hard that Mr Yushchenko's party had started negotiations with the Party of the Regions.
Under Ukraine's constitution, the new coalition has 30 days to put forward a cabinet list.
President Yushchenko's party has nominated Petro Poroshenko for the post of parliamentary speaker.
A confectionery and media magnate, he was a vocal critic of Ms Tymoshenko last year and their clash was instrumental in disabling the "Orange" team.