The deal renews an alliance between the conservatives and two small parties on the left and right.
Jaroslaw Kaczynski, the prime minister, expelled the leftist Self-Defence party from the coalition last month in a row over the budget, leaving him without a majority in parliament.
He called Andrzej Lepper, the Self-Defence leader, “a rabble-rouser”.
But after failing to lure away some of Lepper’s deputies to his own party and in the face of unfavourable opinion polls, Kaczynski had to swallow his pride and invite Lepper back.
Przemyslaw Gosiewski, a member of the ruling Law and Justice party, said: “A coalition agreement has been reached.
“It guarantees a stable majority.”
Lepper will return to his old posts as agriculture minister and deputy prime minister. In turn, he pledged to back the government’s 2007 budget draft, Gosiewski said.
The third party in the revived coalition is the nationalist League of Polish Families.
Self-Defence’s return to government will, however, cast doubt on Poland’s ability to cut the budget deficit and streamline public finances, analysts say, since the party has traditionally called for more social spending.
Earlier on Monday, the International Monetary Fund criticised the government for largely abandoning tax reform.
Some observers questioned whether the coalition will last at all, given its policy differences, personal animosities and its slim majority in parliament following a string of defections from Lepper’s party.
Marek Mazur, a political analyst at Silesia University in Katowice, said: “For today there is a government with majority backing.
“But it looks like chances are low the government will last long.”
Kaczynski and his twin brother, Lech Kaczynski, the president, came to power last year promising to dismantle what they say is a clique of businessmen, secret police and former communists that have dominated Poland since 1989.
Their conservative views on homosexuality, support for the death penalty, and combative diplomatic style have raised worries in Brussels that Poland is drifting away from the European mainstream.
The revival of the coalition means the three parties will easily repel an opposition motion calling snap elections, due to be voted on in parliament on Tuesday.