BERLIN — Olaf Scholz will head a three-party coalition with broad plans for Germany's transition to a green economy, under a deal to end 16 years of government led by Angela Merkel, BBC reported.

Almost two months after his Social Democrat party won federal elections, he will go into power with the Greens and business-friendly Free Democrats.

Climate protection forms a big part of the coalition deal.

The parties aim to phase out coal use by 2030, eight years ahead of schedule.

They will also seek to use 2% of German territory for wind power and focus on hydrogen-based energy too. By 2030, the parties want 80% of electricity to be sourced from renewable energy and 15 million electric cars to be on German roads.

There are also plans to legalize the sale of cannabis in licensed premises, with controls on the quality and distribution of the drug.

Germany is Europe's biggest economy, so decisions taken by the new government will have a big effect on its neighbors.

In a news conference, Scholz, 63, said "sovereignty of Europe is a cornerstone of our foreign policy". He highlighted Germany's friendship with France and partnership with the US.

He spoke of daring to make greater progress in a coalition "on equal terms". He also pointed out that the three parties' wider memberships still had to approve what has been labeled a "traffic-light" coalition, because of the parties' red, yellow and green colours.

Olaf Scholz has served as vice chancellor since 2018 but is set to take over from Angela Merkel in the second week of December

He will only take over as chancellor from Merkel after a vote in the Bundestag, expected between 6 and 9 December.

Scholz will enter office during a difficult period of the Covid-19 pandemic, with Germany one of several European countries where infections have skyrocketed to record levels in recent weeks.

On Wednesday, he said the coalition would ramp up vaccinations and consider making jabs compulsory for health staff and other essential workers.

"The situation is bleak," Scholz said. "The coronavirus is still not vanquished."

The Social Democrats won the 26 September vote, ahead of Merkel's Christian Democrat alliance, which saw its worst-ever election result. The Greens achieved their best-ever result, under candidate Annalena Baerbock, who spoke of an ambitious alliance aiming to start a paradigm shift to transform the economy.

Describing the climate crisis as the biggest challenge of our time she said: "We can transform our economy so it becomes climate neutral. We have an agreement where climate neutrality is a common denominator."

Baerbock is expected to become foreign minister in the new government, while her Greens co-leader Robert Habeck gets the role of vice-chancellor as well as overseeing energy transition.

The new finance minister is set to be Christian Lindner, the Free Democrat leader whose party has a wide following of young voters. "The younger generation has given us this job to overcome the status quo of recent years," he said.