Austria’s Green party is on the verge of entering government for the first time after the environmentalists and the conservative party of former and likely new chancellor Sebastian Kurz agreed to a preliminary coalition deal over the weekend.

As junior coalition partners of the Austrian People’s party (ÖVP), the Greens would take the place of the far-right Freedom party, whose leadership resigned in disgrace over the “Ibiza affair” corruption scandal in May, and which was duly punished by voters in ensuing elections.

Kurz’s ÖVP and the Greens were the big winners in the September vote, the former coming top with 37% and the latter achieving the best result in its history.

After months of protracted coalition talks, the parties reached an agreement on Saturday, with Kurz telling reporters: “I’m very optimistic about the possibility of forming a government with the Greens.”

“We have overcome some seemingly insurmountable hurdles”, said the Green leader, Werner Kogler, who is likely to be made deputy chancellor.

If the Austrian Green party’s 276 delegates formally approve the coalition deal this Saturday, the president, Alexander Van der Bellen, could swear in a new government as soon as 7 January.

The power-sharing deal will be watched with great interest by Austria’s neighbours: in Switzerland, the Greens made historic gains in October elections and have called for reform of the country’s “magic formula” power-sharing arrangement to give the ecological party a bigger say.

In Germany, Angela Merkel’s conservative CDU and the Green party lead the polls, with the next federal elections scheduled for autumn 2021. “Something is happening in our neighbouring country that citizens here can only dream of,” wrote the conservative German daily Die Welt. “A fresh start into a new political era, shaped by two pro-European parties that emerged as clear winners from recent elections”.

The power balance in Austria’s new government is likely to reflect Kurz’s commanding victory in September. The ÖVP is expected to retain control of the key posts of chancellor and finance minister, while also claiming the interior, foreign and defence ministries.

A new ministry for integration looks designated to allow Kurz to continue his hardline policy on immigration. It will be run by his confidante Susanne Raab, who worked on the country’s 2017 ban on full-face veils and a 2015 law designed to curb “political Islam”.

The Green party will aim to exercise the most influence through a boosted ministry for infrastructure, transport and environment, expected to be headed by the former climate activist Leonore Gewessler.

Green politicians in charge of the justice and culture portfolios will hope to curb the more authoritarian tendencies of Kurz’s ÖVP. In the final stretch of negotiations, Austria’s constitutional court ruled that some of the policies proposed by the conservatives – such as expanded surveillance measures or making social benefits conditional on command of the German language – would violate the constitution.

“The Greens’ main aim [during coalition talks] has been to get major concessions on protecting the climate,” said Der Standard newspaper, commenting that the deal with the conservatives was as likely to please environmentalists as to frustrate leftwingers in the party. “With everything else, damage limitation will have to do.”