Talks on a new Labour-Plaid Cymru Welsh Assembly Government are due to begin after the parties agreed a coalition.
A new cabinet will be unveiled in days, which First Minister Rhodri Morgan says will mean stable and progressive rule.
Plaid leader Ieuan Wyn Jones said it would be a "challenge," and as a "junior partner" his party would have to avoid being dominated by Labour.
The number of Plaid cabinet seats will be a key issue, along with which posts Labour will be willing to give up.
Former Plaid leader Dafydd Wigley has called for his party to have at least three cabinet seats, with the economic development, finance and rural affairs portfolios.
Plaid's national council backed the One Wales document by a huge majority in Ceredigion on Saturday, with 92% supporting the deal.
That followed Welsh Labour's vote in favour by four to one on Friday in Cardiff.
The decision means Plaid leader Ieuan Wyn Jones will become deputy first minister to Mr Morgan.
It is a remarkable shift in Welsh politics, and unites two parties which have traditionally been adversaries, particularly in areas such as the south Wales valleys.
Mr Jones told BBC Wales' The Politics Show he understood the concerns about being "a junior partner in a coalition".
"It is going to be a challenge, not only for me, but my colleagues and of course for the two parties to work together. I do recognise the difficulties people on both sides have had with this arrangement."
But the Plaid leader said the coalition was not only about constitutional issues, such as an agreement for a referendum on turning the assembly into a Scottish-style parliament, but also about "bread-and-butter" matters such as education and health.
Coalition opponent and Labour MP Don Touhig told the programme it would be "hugely difficult" to explain the deal to Labour supporters.
The number of cabinet seats for Plaid will be a key issue, along with which portfolios Labour will be willing to give up.
There are presently seven Labour cabinet ministers. The Government of Wales Act 2006 says the maximum size of the assembly government can be 14, including deputy ministers, but that excludes the first minister and the legal adviser, the consul general, who need not necessarily be an AM.
Mr Wigley, who led Plaid twice, from 1981-84 and 1991-2000, and is now its honorary president, said he wanted his party to have at least three seats in a cabinet of eight, and four if it is bigger.
He told BBC Radio Cymru that this was a new chapter in Welsh political history.
"For two months the people of Wales have been waiting for leadership from the assembly - and I think the patience of some people had gone.
"The proof of this government will come when the [UK government's] comprehensive spending review is announced in the autumn - if there is enough coming through to pay for the policies in the One Wales document.
When asked whether he agreed with Mr Wigley on the specific cabinet posts, Mr Jones said it was an interesting position which he would consider during discussions.
Mr Morgan said: "I'm very pleased that Plaid Cymru have agreed the coalition deal.
"I will be meeting with Ieuan Wyn Jones in due course in order to form a stable government which will deliver a progressive agenda for Wales."
Labour sought coalition after failing to win a majority at the assembly election on 3 May. It won 26 seats, with Plaid on 15, Conservatives 12, Liberal Democrats six and independents one.
Talks have been going on between the parties in the two months since the election. At one stage it looked as if Plaid would form a so-called rainbow coalition with the Tories and Lib Dems, but the party eventually opted for a Labour deal.
However, many Labour MPs and some AMs remain opposed to the coalition, and some predicted there would not be a referendum on giving the assembly more powers in the near future.
Assembly Presiding Officer Lord Elis-Thomas, a Plaid AM, said he was "ecstatic" with the outcome.
"This means that the party has positioned itself in an ideal position for its future development," he said.
Tory assembly leader Nick Bourne, who will now become the official opposition leader, said: "We will scrutinise every decision and every announcement.
"I remain convinced that no matter how hard they try, Plaid Cymru will be dominated by Labour in this new arrangement."