The coalition agreement between the Social Democrats and Merkel's CDU/CSU bloc is still subject to approval from the SPD's around 460,000 members.
And it still has to be approved by the full SPD membership.
His withdrawal was a response to an outcry in the Social Democrats' base, with many saying Schulz, who led the party to its worst election result since World War II previous year, had broken his promise never to enter a Merkel government.
The SPD has managed to secure the finance, foreign and labour ministries as part of the deal, "a significant feat for the leader, Martin Schulz", who is set to land the job of foreign minister, says The Guardian.
The agreement for a renewed "grand coalition" comes after days of marathon talks in which negotiators from all three parties haggled over everything from foreign policy to labor issues and healthcare.
After the SPD's losses in the September 24 national election, Schulz announced that the SPD would go into coalition and that he wouldn't hold talks with Merkel. The results from that are due in early March, and that vote is now looking too close to call either way. CDU members are quietly fuming that they have traded the Finance and Interior Ministries for the rather less glamorous Agriculture and Economy.
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At any rate, the president is reportedly unhappy with the way the White House has handled the Porter story. Shah said the original support for Porter from the White House was based on incomplete information.
The former president of the European Parliament said he believed the internal dispute of SPD may risk the coalition deal with the Conservatives Union led by Chancellor Angela Merkel. Schulz has lost his credibility and his reputation.
Prospective German Foreign Minister Martin Schulz has announced that he will not take up a ministerial post in the next coalition government.
A Forsa poll showed nearly three-quarters of Germans thought it would be wrong for Schulz to become foreign minister, while only around a quarter thought that would be the right move.
So where does this leave Germany, and its relationship with the UK? The result, expected March 4, is unpredictable because many are suspicious of entering a new government after a disastrous election result.
It's been over four months since its latest elections, and Germany finally has a government again.
Merkel, too, appears near the end of her tenure, with no great clarity about her successor's identity (smart money is on Saarland state premier Annegret Kramp-Karrenbauer).