Chancellor Angela Merkel's conservatives and Germany's main centre-left party have reached a deal to form a new government, more than two months after the country's elections, according to the Associated Press.

Negotiators from Ms Merkel's Union bloc and the Social Democrats said they concluded a coalition deal early today after an all-night round of talks.

Merkel won elections in September but fell short of a parliamentary majority and had to find a new coalition partner.

The "grand coalition" of Germany's biggest parties still requires approval in a ballot of the Social Democrats' members, some of whom are deeply sceptical. The result is expected in mid-December.

The two sides agreed to introduce a mandatory national minimum wage, a key centre-left demand, but the conservatives got their way on their refusal to raise taxes.