LABOR will form a minority government in the ACT with the support of Greens MLA Shane Rattenbury.
A 100-point agreement with Labor leader Katy Gallagher includes an early start on a Canberra light rail system, legislation for gay marriage, a clean-up of Canberra's lakes, better social housing and 90 per cent use of renewable energy in the ACT by 2020.
Mr Rattenbury will take a yet to be decided cabinet position in the six-member ministry.
As a consolation, the Liberals will gain the parliamentary Speaker position and will chair the powerful public accounts and estimates committees.
The agreement follows the ACT election on October 20 which returned eight Labor and eight Liberal MPs, but cut Greens numbers from four to one.
Mr Rattenbury said the poll result left him with "an unexpectedly singular responsibility" to decide on what was best for all of Canberra, based on good policy.
"The negotiations have been conducted with goodwill with both leaders but I have decided to support Katy Gallagher and the Labor Party to be the government in the ACT for the next four years," he told reporters.
Mr Rattenbury said he had not secured everything on the Greens election platform.
"I am mindful that as one Green in the assembly we needed to be responsible in the requests we have made," he said.
"We feel we have put forward a package that is affordable and is fiscally responsible. The things that have been agreed to were all fully costed by Treasury."
Ms Gallagher, who will resume her position as chief minister, said she was proud to have led the Labor team back into government, achieving a small but significant swing.
"But I can assure every member of the community that Labor will be listening hard to the echoes that reverberate from October 20 and heeding the messages both positive and negative," she said.
Ms Gallagher said the agreement with Mr Rattenbury wasn't unconditional.
"We have sought a very strong commitment that he wouldn't withdraw his confidence other than for a very very significant matter," she said.
ACT Opposition Leader Zed Seselja said he was disappointed and many Canberrans would feel the same way.
But he conceded there was never any reasonable prospect Mr Rattenbury would have backed the Liberals.
"I have now seen it in numerous different circumstances ... that no matter who won the popular votes, the Greens have backed Labor, no matter what policies were on the table, the Greens backed Labor, and no matter whether ministries were on offer, the Greens backed Labor," he said.
"I think that speaks for itself."
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