The Catalan separatist Junts party has agreed to support a Socialist-led coalition government, the parties announced on Thursday.
Socialist lawmaker and party official Santos Cerdan announced the deal on Thursday in Brussels after sealing the agreement with the party led by Carles Puigdemont, who fled to Belgium after leading the failed 2017 independence attempt for Catalonia.
"It's not an agreement for an investiture, it's a deal for a four-year legislature," Mr Cerdan, the third-ranking Socialist Party leader who has been involved in negotiations, told reporters on Thursday in Brussels.
He added that the deal included an amnesty bill for people involved in the northeastern region of Catalonia's failed bid for independence from Madrid, covering events between 2012 and 2023.
Judges would decide the specific names of individuals for which the amnesty will apply, Mr Cerdan said.
Spain's acting Prime Minister Pedro Sanchez and his Socialist Party (PSOE) have been trying to form a government after a July election produced no outright winner.
He reached a deal to govern in coalition with the hard left Sumar platform last month but also needs several other smaller parties - who have supported him in the past - to back him in an investiture vote that could take place as soon as next week.
Junts has said during negotiations that it would give its seven votes in parliament in exchange for an amnesty law that could exculpate as many as 1,400 activists and politicians involved in a failed attempt to separate Catalonia from the rest of Spain that reached a head in 2017.
The PSOE on November 2 also signed a deal with another Catalan pro-independence party, Esquerra Republicana de Catalunya (ERC).
The amnesty has met fierce condemnation from Mr Sanchez's conservative opponents who have organised large protests and accused him of putting the rule of law in Spain on the line for his own political gain.
Protests also sparked in Madrid on Tuesday ahead of the agreement.
Up to 7,000 people gathered outside the Socialist Party headquarters in the capital which saw 29 police and 10 demonstrators injured.
Mr Sánchez posted a defiant message on social media, however, saying: "They will not break the Socialist Party."Former Conservative People's Party (PP) leader and prime minister, Jose María Aznar described Mr Sanchez as "a danger for Spanish constitutional democracy".
Current PP leader, Alberto Nunez Feijoo, said that "violence does not have a space in democracy" following the unrest but that "the social unrest is the fault of Pedro Sánchez."
