The Tripoli-based General National Congress and the United Nations-recognised House of Representatives in Tobruk have agreed to hold elections within two years. They have also agreed to form a 10-member committee to help choose a government of national reconciliation. An interim president and a deputy will be picked within two weeks.
This initial agreement comes ahead of another round of UN-brokered peace talks in Rome later this month.
But the weakened security situation in Libya has helped the Islamic State of Iraq and the Levant (ISIL) group establish a base in the country. It is estimated that the armed group has up to 3,000 fighters who control large parts of the cities Derna and Sirte.
The UN has warned of the need for political rivals to unite in order to defeat ISIL's ideology.
So, will the deal work? And how will ISIL's increasing presence in Libya affect the agreement?
Presenter: Martine Dennis
Anas El Gomati - director of Libya's first think-tank, Sadeq Institute
Fatima Hamroush - former minister of health in the Libyan Transitional Government
George Joffe - deputy director and professorial research fellow at the Global Policy Institute
Source: Al Jazeera