Tanzania's ruling party will share power with the opposition Civic United Front on the semi-autonomous islands of Zanzibar, opposition officials say.
Opposition leader Seif Sharrif Hamad said the deal will end the political rift that emerged after the 2005 polls.
But President Amani Karume of the governing Chama Cha Mapinduzi (CCM) is yet to comment on the deal.
Cuf maintains that it was cheated of electoral victory in Zanzibar - its main power base in Tanzania.
Zanzibar maintains a political union with Tanzania, but has its own parliament and president.
Cuf mainly draws its support from the archipelago's Pemba island and CCM from Unguja, the island more commonly referred to as Zanzibar.
In recent years, elections have been marred by violence.
The BBC's Ally Saleh in Zanzibar says representatives from the ruling party and the opposition reached the agreement last month and have been waiting for the parties to approve the arrangement.
The ruling CCM is set to hold a national executive council meeting at the end of March where the power-sharing arrangement is expected to be adopted.
Our correspondent says Cuf party's executive council approved the deal on Monday before making the announcement at a huge public rally.
Mr Hamad told his supporters the agreement provides for the president to be drawn from the winning party while the chief minister will be picked for the party that comes second at the elections.
Mr Hamad, who was Cuf's presidential candidate, is poised to be the chief minister if the deal is implemented, our correspondent says.
But critics feel the arrangement should be written into the constitution, given the divisive nature of Zanzibari politics.
"Experience has shown us that the present arrangement where the winner with a slight majority takes it all is the source of the political crisis in Zanzibar," Tanzanian-based political analyst Prof Haroub Othman said.