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.

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

Merkel won elections in September but fell short of a parliamentary majority and had to reach across the aisle for 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 skeptical. The result is expected in mid-December.

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