Berlin (CNN) German Chancellor Angela Merkel moved a step closer to forming a coalition government with her center-left rivals on Wednesday, after four months of political uncertainty.

A spokesperson for the Social Democrats, (SPD) confirmed it had reached a deal with Merkel's center-right CDU/CSU, but stressed that it would need to be formally approved by the party's 460,000 members.

The announcement represents a huge breakthrough for Merkel, who has struggled to form a government since suffering embarrassment at September's election.

The deal paves the way for a return to the so-called "grand coalition" between the CDU and SPD, which governed prior to the last election. It would also leave the right-wing Alternative for Germany party as the main opposition in the German parliament.

German Chancellor Angela Merkel and leader of the German Social Democrats (SPD) Martin Schulz are set for another Grand Coalition.

The AfD's anti-immigration stance proved popular with voters, taking it to 12.6% of the vote, a political earthquake in Germany.

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