Pakistan's two dynastic political parties have agreed to power-share, making Shehbaz Sharif the new Prime Minister and leaving jailed leader Imran Khan's loyalists out of government.

The army-backed Pakistan Muslim League-Nawaz (PML-N) and the Pakistan Peoples Party (PPP) said they had settled days of negotiations on securing a majority to form a coalition government that will also include several smaller parties, after the Feb. 8 polls returned no clear winner.

Candidates loyal to Khan's Pakistan Tehreek-e-Insaf (PTI) party won the most seats but were forced to stand as independents following a sweeping crackdown on the party in the lead-up to the election, which was marred by allegations of vote rigging.

The proposed new government looks much the same as the shaky coalition that combined to oust Khan in a no-confidence vote in 2022 when Sharif became prime minister for the first time.

On the streets of the capital Islamabad, some were skeptical of what the new government had to offer.

"Establishing a (coalition) government hasn't proved beneficial in the past," said retired 67-year-old Saeed Asmat.

"Each time they formed a government, inflation skyrocketed, making it difficult for the poor to survive," he added. "What actions will they take now?"

The deal was announced at a late-night press conference in Islamabad, announcing Asif Ali Zardari, the husband of assassinated former Prime Minister Benazir Bhutto, as president.

"The Pakistan Peoples Party and Pakistan Muslim League Nawaz have attained the numbers and we will form a government," said PPP Chairman Bilawal Bhutto Zardari, the son of Zardari and Bhutto.

"We are hopeful that Shehbaz Sharif will soon become the prime minister of the country and the whole of Pakistan should pray that the government should be successful."

Bhutto Zardari, who was foreign minister under Sharif in the last government which dissolved in August ahead of elections, said ministerial portfolios had been agreed and would be announced in the coming days.

The National Assembly must convene by Feb. 29, when the coalition can be formally approved.