Mufti Muhammad Sayeed said he would also ask the Indian Government to initiate dialogue with the newly-elected legislature and other segments of public opinion to restore peace in Kashmir.
Mr Sayeed announced a 31-point programme in Delhi after long deliberation with the leading coalition partner, the Congress Party.
The new government says it will assist Delhi in the suppression of cross-border militancy in Kashmir.
"There is cross-border terrorism from Pakistan but we would like to end indigenous militancy of Kashmir," Mr Sayeed added.
The new government will also announce a comprehensive rehabilitation package for those affected by militant violence.
Mr Sayeed said his government would aim "to win the hearts and minds of the people" and would provide education to orphans created by the violence.
He also promised to look into the possibility of releasing all those being held in detention without being formally charged.
"The goal of the coalition is to heal the physical, psychological and emotional wounds inflicted by years of militancy, to complete the revival of the political process which was begun by recently concluded elections," said Mr Sayeed.
Shaky coalition
The two leading coalition partners have also agreed to rotate the position of chief minister.
After three years, midway during the life of the assembly, Mr Sayeed will hand over the post to a Congress nominee.
With 20 assembly seats, the Congress Party is the biggest in the coalition followed by the 16-member PDP.
Also involved in the deliberations was the Marxist leader Yusuf Tarigami. With his seven-member People's Democratic Forum, he played a crucial role in bringing the coalition together.
Many observers say that Mr Sayeed will have to toe a cautious line as the Congress, a national party, cannot afford to be seen to be soft on militancy in Kashmir.