DUBLIN - The two parties that topped last month's legislative elections in Ireland, Fine Gael and Labour, have agreed to form a coalition government, Fine Gael leader Enda Kenny said on Sunday.

"I am happy to tell you that we have concluded an agreement," Kenny told RTE state radio, adding: "Some of the final details are now being worked out for presentation to both parties."

The Feb 25 election has redrawn the political map of Ireland as voters hammered Fianna Fail, the party of outgoing Premier Brian Cowen which had dominated Irish politics for 80 years, three months after it agreed an EU-IMF 85 billion euro ($115 billion) bailout, which many Irish see as a humiliation.

Ireland became the second country in the 17-nation eurozone after Greece to accept a bailout following the collapse of an economy whose roaring growth saw it dubbed the "Celtic Tiger".

Kenny, a 59-year-old former teacher, is keen to wrap up the coalition talks quickly so that he can get on with trying to renegotiate the terms of the bailout.

In the election Fine Gael became the largest party with 76 seats in the 166-member Dail, the lower house of parliament, following the historic defeat of the ruling Fianna Fail party.

Labour has 37 and Fianna Fail, Cowen's party, was left with just 20 seats, down from the 78 it won in 2007.

Fianna Fail's former coalition partner, the Green Party, was also punished, losing all of its six seats.

The Sinn Fein party almost tripled its seats to 14, including its President Gerry Adams, who enters the Dail for the first time, while 19 independents and other lawmakers were elected.

AFP