Irish political parties Fianna Fail, Fine Gael and the Greens will sign a deal on Monday on the formation of a new coalition government, Fianna Fail leader Micheal Martin said after talks on Sunday aimed at ending four months of political deadlock.

The talks will resume on Monday morning to resolve the final issues, negotiators for the three parties told reporters. Green Party leader Eamon Ryan said it was just a matter of "crossing the 't's" in the proposed policy program.

"We've had good progress made, so we're going to sign off tomorrow on it," Martin said. "We're nearly there."

Martin, whose party has 37 seats in the 160-seat parliament after the closely fought February election, is widely expected to take over as prime minister from Leo Varadkar, whose Fine Gael party has 35 seats, if the deal is ratified by grassroots members of each party.

Martin and Varadkar are then expected to rotate the role during the government's five-year term.

The policy program includes plans for a July stimulus package for sectors most impacted by the coronavirus shutdown of the economy such as hospitality and the arts, a source involved in the talks told Reuters. A more comprehensive national recovery plan will follow alongside the budget in October.

The parties will also set up a unit in the prime minister's office to oversee all-island cooperation with British-run Northern Ireland, the source said. That stops short of Fianna Fail's election plan that such a unit would study how Dublin should approach the handling of an Irish unity referendum.

Historic rivals Fianna Fail and Fine Gael need the Greens'12 seats to command a majority in the fractured parliament that cannot pass any new laws, including those needed to uphold a 6.5 billion euro (7.3 billion U.S. dollars) package of support measures for coronavirus-hit businesses, until a new government is formed.

Any agreement would have to be ratified by rank and file members from each party, with the smaller Greens requiring two-thirds support, a higher bar than the larger parties and which could yet scupper the deal.