The decision was announced after a meeting between Lebanese President Michel Sleiman and Fouad Siniora, who has been reinstated as the country's prime minister. The new cabinet comprises 30 ministers: 16 represent the ruling majority; 11 are opposition members; and three are presidential appointees.
At his speech shortly after the declaration, the prime minister said his government had two major tasks - "restoring trust in the Lebanese political system... and holding transparent parliamentary elections."
The new government has to adopt a new election law before parliamentary elections due in May 2009.
Saad al-Hariri, the parliamentary majority leader, said the breakthrough in negotiations was reached after his faction agreed to nominate the former head of the Syrian Social Nationalist Party, Ali Kanso, as a Cabinet minister.
It is hoped the unity government will help to overcome tensions between the Western-backed ruling majority and Hezbollah-led opposition, which were at the heart of the country's 18-month political crisis.
Lebanon's political stalemate began in late 2006 when pro-Syrian ministers quit the cabinet of Prime Minister Fouad Siniora during a power struggle. The U.S.-backed government and the Hezbollah-led opposition spent more than a year deadlocked and unable to elect a president.
Violent clashes that broke out between the factions in early May left more than 80 people dead and about 200 wounded.
