The SNP Government and the Scottish Greens have agreed to work together to “provide effective and responsible leadership for Scotland” over the next five years.
The deal will bring forward plans to legislate for a second independence referendum and lead to two Green MSPs becoming government ministers.
The pro-independent parties will work to prioritise a green economic recovery from the pandemic, respond to the climate crisis and “create a fairer country”.
A shared draft policy programme – the Bute House Agreement – has been agreed.
Speaking at Bute House, the First Minister confirmed that the two parties have “reached a proposed co-operation agreement”, which she labelled “groundbreaking in both Scottish and in UK politics”.
She added the deal is “about doing politics and government better”.
The draft deal details collaboration on the climate emergency, economic recovery, child poverty, the natural environment, energy and the constitution.
It includes commitments to hold a referendum on Scottish independence after the pandemic has passed, within the current parliamentary session, increase investment in active travel and public transport, including a Fair Fares review to provide a realistic and affordable alternative to car use and a strengthened framework of support for the marine renewables and offshore wind sectors.
The deal will also take forward a ten-year £500 million Just Transition Fund for the North East and Moray, significantly increase the level of the Scottish Child Payment, in order to maximise the impact on child poverty, with the full £20 payment being achieved within the lifetime of the Parliament.
The document will designate at least one new National Park by the end of this parliamentary session, enhance marine environmental protection, implement an effective national system of rent controls, enhance tenants’ rights and deliver 110,000 affordable homes by 2032.
The co-operation deal will lead to at least £1.8 billion of investment over this parliamentary session in energy efficiency and renewable heating and establish two new Scottish Government overseas offices in Warsaw and Copenhagen to promote Scotland’s interests in central Europe and the Nordic countries.
The draft agreements will now be considered by the respective political parties involved and ministers will provide an update to Parliament following recess.
Ms Sturgeon said: “I am delighted that the Scottish Government has reached a ground-breaking agreement with the Scottish Green Party that meets the challenges and opportunities of our time.
“The challenges we face have rarely been greater – the climate emergency, recovery from a global pandemic and an assault by the UK government on the powers of our Parliament.
“Today’s politics can too often feel small – polarised, divided and incapable of meeting the moment – and this agreement is intended to change that in Scotland. It is about doing politics and governance better to find the solutions needed to solve the problems confronting the world today.
“The spirit of co-operation and consensus-building is very much in keeping with the founding principles of our Scottish Parliament. We do not agree on everything but we are coming out of our comfort zones to focus on what we do agree on.”
She added: “The agreement delivers bold policy action on pressing issues. A commitment to more affordable housing, a better deal for tenants and action to tackle poverty and inequality – steps to accelerate our transition to net zero – more support for active travel, transformation of home energy and a ten year transition fund for the North East of Scotland.
“A focus on green jobs and fair work – and a sustainable recovery from Covid. We also reaffirm in this agreement our shared commitment to securing independence for Scotland, and to giving people the right to choose our country’s future through a referendum.
“It recognises that business as usual is not good enough – we need boldness, courage and a will to do things differently. That is what we offer.”
Green Party co-leader Patrick Harvie said: “This is a historic moment, which could not come at a more important time.
“We must build a fairer and compassionate country and we must do everything in our power to tackle the escalating climate and nature emergencies to deliver a just transition for all. That is what this deal will do.
“Fundamentally this is a new approach to politics. We agree on some things and disagree on others – those distinctive voices can and will remain.”
Green Party co-leader Lorna Slater added: “The stakes could not be higher – with the COP26 climate conference coming to Glasgow, Scotland is in a position show real leadership on climate. But this deal is about people as well as the planet.
“Together, we would deliver a new deal for tenants, giving tenants more rights and introducing rent controls to help tackle Scotland’s housing crisis, create a new National Park, and much more.
“That’s why we are pledging to work together to build a greener, fairer and independent Scotland.”