Angela Merkel, leader of Germany's conservative Christian Democratic Union party (CDU) sits in her limousine as she arrives for a party leaders meeting in Berlin October 10, 2005. (Reuters photo)

BERLIN, Oct. 10 (Xinhuanet) -- German conservative leader Angela Merkel is to become the country's first woman chancellor after incumbent Chancellor Gerhard Schroeder agreed to step down, German media reported on Monday.

    Under a deal between the Christian Democratic Union and the Christian Social Union (CDU/CSU) and the Social Democratic Party (SPD), Merkel will lead a grand coalition of the two parties.

    The SPD agreed the CDU/CSU will "supply the new head of the government," German news agency DPA quoted sources as saying.

    The SPD and the CDU/CSU will control eight ministries each. Almost all the major ministerial posts, the foreign, finance, labor, justice, health, transport, environment and foreign aid, will go to the SPD.

    The CDU/CSU will get the defense ministry, the interior and a new ministry for economics and high technology, according to the DPA.

    Wolfgang Schaeuble, former chairman of the CDU, will be interior minister while the CSU's chairman Edmund Stoiber will head the new ministry for economics and high technology.

    Merkel and SPD leaders are expected to hold separate press conferences later Monday after meeting top aides and holding another face-to-face meeting.

    A deal between the two groups on the formation of a new government could be announced by the two parties at their press conferences.

    However, under Germany's election law, the chancellor should beelected by the Bundestag or the low house of the parliament.

    Therefore an agreement between the SPD and CDU/CSU is "not a done deal" as several SPD members have vowed to vote against Merkel in the Bundestag.

    Reports say that incumbent Chancellor Gerhard Schroeder appeared over the weekend to be ready to step aside to make way for Merkel to become chancellor.

    In return, the CDU has agreed to give half of all cabinet poststo the SPD.

    Before the new round of talks, the SPD searched its ranks for candidate to take the post of vice chancellor and possibly that offoreign minister in the new government.

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    Matthias Platzeck, popular SPD premier of Brandenburg, turned down a request from party leaders that he take the post of vice chancellor, which is likely the SPD standard bearer in the new government.

    He told Berlin's daily newspaper Tagesspiegel on Sunday that hehad promised the Brandenburg voters to stay on his post after winning reelection in a recent state election.

    Powerful SPD members, such as Interior Minister Otto Schily, have argued for Schroeder to remain in the post of chancellor for another two years and then hand it to Merkel.

    The two parties have been engaging for a grand coalition as both camps failed to achieve a majority in the Sept. 18 elections.

    Schroeder, SPD Chairman Franz Muentefering, Merkel and Edmund Stoiber, leader of the CDU's Bavaria-based sister party Christian Social Union (CSU) are attending the meeting on Monday.

    The two sides has edged closer on key issues such as the labor market reform, social welfare system and public finances.

    The German political crisis resulted from the Sept. 18 elections, in which neither the SPD-Green coalition nor the CDU/ CSU-FDP alliance won a majority.

    The CDU/CSU seized 226 seats in the Bundestag, four more than that of the SPD.

    After attempts to join hands with smaller parties failed, the SPD and CDU/CSU have sought to forge a grand coalition government, which was once seen between 1966 and 1969. Enditem