Under the deal, Sergei Bagapsh, who claimed victory in the disputed October poll, will be the presidential candidate. His former rival, Russian-backed former Prime Minister Raul Khajimba, will be the vice-presidential candidate.
Khajimba said both sides want to resolve their dispute.
"We will take all measures to defuse today's situation so we can hold a new election that will allow us to be on one team," Khajimba said.
Under the deal, reports say the vice-presidential powers will be increased to nearly the same as the president's powers.
Reports say the two men have also agreed to withdraw their armed supporters.
The agreement, reached in talks mediated by Russian Deputy Prosecutor-General Vladimir Kolesnikov, cancels Bagapsh's plan to hold his own inauguration today.
No date for a new election has been given.
(Reuters/AP/AFP/Itar-Tass)Recent stories:Four Blasts Hit Abkhazia