The deal would see the secessionist Southern Transitional Council (STC) handed a number of ministries, and the government return to the southern city of Aden, according to official sources and reports in Saudi media.
Security Belt Forces, dominated by the STC, in August took control of Aden, which has served as the beleaguered government’s base since it was ousted from the capital Sanaa by Iran-backed Huthi rebels in 2014.
The clashes between separatists and government forces, who for years fought on the same side against the Huthis, had raised fears that the country could break apart entirely.
The warring factions have in recent weeks been holding indirect and discreet talks mediated by Saudi Arabia in the kingdom’s western city of Jeddah.
An STC official in Riyadh told AFP that the deal had been agreed and he hoped the government would add its signature soon.
“We signed the final draft of the agreement and are waiting for the joint signature within days,” he said, adding that both Yemen’s President Abedrabbo Mansour Hadi and STC leader Aidarous al-Zoubeidi are expected to attend a ceremony in Riyadh.
A Yemeni government official, declining to be named, confirmed the deal had been agreed and would be signed within days.
It sets out “the reformation of the government, with the STC included in a number of ministries, and the return of the government to Aden within seven days after the agreement being signed,” he told AFP.
Saudi Arabia’s Al-Ekhbariya state television said a government of 24 ministers would be formed, “divided equally between the southern and northern governorates of Yemen.”
Under the deal, the Yemeni prime minister would return to Aden to “reactivate state institutions,” it added.
Al-Ekhbariya said the Saudi-led military coalition, which has intervened on the government’s side against the Huthis, would oversee a “joint committee” to implement the agreement.