A political spokesman said on Sunday that the government will move a motion in the interim parliament to amend the provisional constitution to incorporate the agreement.
"Nepal will be a Federal Democratic Republic nation ... and the decision will be implemented after the first meeting of the constituent assembly," the six-party ruling alliance and the Maoists said in a statement.
"But if the king creates serious hurdles to the constituent assembly elections a two-third majority of the (interim) parliament can remove the monarchy even before the polls."
Nepal's politicians have also agreed to increase the number of seats in the constituent assembly to 601 from 497.
A total of 335 of them will be elected on the basis of proportional representation, 240 on first-past-the-post basis and the rest to be nominated by the cabinet.
The Maoists had previously demanded fully proportional elections.
SD Muni, a Nepal analyst based in New Delhi, told Al Jazeera: "There is a 22-point agreement between the Maoists and the other political parties, and much of the stability of the government will depend upon implementing those 22 points.
Poll date fixed
The twice-delayed elections will now be held within the Nepali year which ends on April 12 and the Maoists will rejoin the government.
This was disclosed by Arjun Narsingh KC, a spokesman for the Nepali Congress Party, the country's biggest, on Sunday.
|Poll will be held by on April 12 next year, a|
Congress party spokesman said [Reuters]
The government will decide the election dates.
As part of the agreement, the government will also begin the process of integrating the former Maoist fighters and pay their wages regularly, the statement said.
In return the Maoists will hand back the property and land seized from the people during the conflict.
Thousands of Maoist former fighters are confined to UN-monitored camps since last year after the government agreed for the elections, a key demand of the Maoists during the war which started in 1996.
Muni said: "It is quite likely that the king and the royalist forces will try to interfere or influence the election process in a manner that in the final constituent assembly the pro-monarchists have a sizeable strength so that they can defeat any proposal.
"So I don't rule out the possibility of the king trying to sabotage this process."
The Himalayan nation experienced severe political turmoil three months ago when the anti-monarchy Maoists, who ended their decade-long civil war last year, quit the government.
They were demanding an immediate declaration of a republic, a step that indefinitely delayed the constituent assembly elections that had been set for November.
Those polls, Nepal's first national vote since 1999, were meant to map the country's political future, including that of the monarchy, and expected to cap the landmark peace deal.
The popularity of King Gyanendra collapsed when he dismissed the government and assumed absolute powers in 2005 only to bow down after weeks of protest last year.