After two days of talks, the ruling People's Democratic Party has agreed to share control of the country with the leading opposition party, the All Nigeria People's Party.
"Consequent to this agreement, the ANPP accepts to participate in the Yar 'Adua administration," an official from the ANPP announced in a statement.
The two parties plan to address April's complicated electoral events and oil trade, which has garnered attention due to four days of oil-worker strikes.
Last week, leaders of the PENGASSAN union of the Department of Petroleum Resources met with government officials to discuss the strike over an increase in fuel price.
These complications have made the first weeks of President Yar'Adua's reign, which began May 29, tumultuous at best. The president was picked as the PDP's candidate by former president Olusegun Obasanjo, who sold two major oil companies to the private sector and raised taxes for oil workers just days before leaving office.
As Africa's largest oil producer, Nigeria depends on the oil industry for sustenance, which is under threat from the oil-workers' strike.
Yar'Adua is under heavy pressure to satisfy oil workers in their demands and uphold the interests of his party. The PDP is hoping to bring about compromise by working with the ANPP to find solutions to the strikers' demands and to settle controversy over April's elections.
"State elections on April 14 were marred by widespread ballot stuffing, rigging and intimidation in many areas, leading international observers to call for the cancellation of results in as many as 10 of the 36 states," The New York Times reported in April. "The governing People's Democratic Party won 27 of 36 governorships and state legislatures."
After problems with the state elections, presidential elections brought even more complications. The New York Times reported that presidential voting took place "amid chaos and delay in some parts of the country ... with a botched attempt to crash a tanker truck in the headquarters of the electoral commission in Abuja, the nation's capital, as well as violent protests and ballot-box snatching."
Efforts to stabilize the political situation have faced continued unrest throughout the country. In mid-April, Nigerian troops clashed with suspected Islamic militants, killing 25 who had launched an attack on a police station. There was also an attempt to assassinate Goodluck Johnson, the PDP's vice-presidential candidate.
Muhammadu Buhari, who was the ANPP's presidential candidate in April, has not been involved in recent talks with the ruling party.
The PDP is also undergoing negotiations with two other opposition parties, in the hopes that they can achieve similar arrangements.