Two months after inconclusive parliamentary elections left the country paralysed, a new Italian government, including one of Silvio Berlusconi's closest allies as deputy prime minister, will be sworn in on Sunday.

Enrico Letta, the prime minister designate asked by President Giorgio Napolitano to form an administration last week, unveiled a list of ministers on Saturday who he said would form a grand coalition government. They will be voted on by parliament on Monday.

Angelino Alfano, the secretary of Berlusconi's centre-right Freedom People party (PdL), would be deputy prime minister and interior minister, said Letta – a victory for Berlusconi, the three-time former prime minister who just six months ago had been written off by many as being politically unsalvageable.

Alongside him in the new cabinet will be Fabrizio Saccomanni, the director-general of the Bank of Italy; Emma Bonino, a former European commissioner, as foreign minister; and Enrico Giovannini, the head of Italy's statistics agency Istat, as labour minister. The government, which brings together politicians from the centre-left, centre-right and centre, as well as technocrats, was described as the "only government possible" by Napolitano.

The elections in late February created a deadlock in the Italian parliament that had never been seen before, with a centre-left bloc of the Democratic party (PD) and its allies having a working majority in one house but not the other. Vying for control of the senate was a centre-right bloc led by the PdL, with Beppe Grillo's Five Star Movement holding the balance of power. Pier Luigi Bersani, the then PD leader, refused to enter a grand coalition government with the centre-right. But he was forced to resign after weeks of wrangling and a disastrous presidential election. Letta, his deputy, took over the negotiations last week.