The country's most populous region wields wide-ranging powers in areas such as health, education and housing in Spain's decentralised political system, giving national significance to such agreements.
The deal between the Popular Party (PP) and far-right Vox is the fourth in recent months after similar coalitions were agreed following regional polls in Extremadura, Aragón and Castilla y León.
Mirroring a pattern in those votes, Andalusia's incumbent PP leader Juanma Moreno won the most seats in a May election but fell short of repeating his majority.
Prime Minister Pedro Sánchez's Socialists, dogged by a string of corruption scandals, suffered their worst-ever result in the southern region they once governed for nearly 40 years.
READ ALSO: Three key takeaways from Andalusia's election results
Third-placed Vox proved a kingmaker as its support returned Moreno to his post during a vote in the regional parliament in Seville on Thursday.
Instead of fresh elections that "would paralyse our region for six months, an agreement has been reached which I think is positive for Andalusia", Moreno told reporters shortly before he was voted in.
In return, the PP has accepted Vox's "national priority" policy that makes access to some public services and benefits contingent on what it deems a "real attachment" to a territory.
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The left, which has suffered four straight regional election drubbings, has condemned that approach as xenophobic.
The PP has not ruled out working with Vox to govern if the next national vote in 2027 produces another hung parliament, which most polls suggest is likely in Spain's increasingly fragmented politics.
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