The UN announced the national unity government between the rival governments on Thursday after months of tough talks to end violence in the war-torn country.
Since the fall of dictator Moammar Gadhafi four years ago, Libya has been racked by violence and instability. The country splintered last year after an alliance of Islamist-backed militias pushed the internationally recognized and elected parliament out of Tripoli to Tobruk, in the east of the country.
UN envoy for Libya Bernardino Leon (pictured) said the two sides had agreed on a list of candidates, with Fayez Sarraj as the new prime minister of the unity government.
"After a year of work on this process, after working with more than 150 Libyan personalities from all the regions, finally the moment has come in which we can propose a national unity government," Leon said in Morocco where the talks have been held.
The deal must now be approved by each of the rival government's parliaments. It still faces a number of hurdles, including gaining support of hardliners on both sides and implementation of the deal's provisions.
The agreement comes as Western countries have raised concern the "Islamic State" militant group has taken advantage of the instability to carve out territory and influence in the oil-rich country.
The instability has also turned Libya into a center of people smuggling into Europe as the continent faces a refugee crisis. Hundreds have died making the dangerous journey across the Mediterranean.
Federica Mogherini, the EU's foreign policy chief, welcomed the unity government, pledging that the bloc would provide 100 million euros ($112 million) in financial and political support to the new government.
Meanwhile, the UN Security Council is expected to vote on a resolution on Friday to authorize the EU to intercept and seize boats used to smuggle migrants crossing the Mediterranean from Libya. That resolution would give international legitimacy to an EU naval mission aimed at stemming a surge of migrants from Libya and arresting criminal human traffickers.
cw/jr (AP, dpa, Reuters)