"We are relieved, the result shows that we had to fight for this majority," Schulz said.
Schulz had previously ruled out entering into another "grand coalition" with Merkel after his party suffered its worst ever result in the federal elections in September.
Merkel has ruled with the SPD in two of her three terms in office, including in the last parliament from 2013-2017. A re-run of their partnership is not yet certain, according to the reports.
The move paves the way for negotiators to launch comprehensive negotiations this week. If the talks are triumphantly concluded, a new government could be in place by mid-March - nearly six months after September's complicated polls. (ANI)