Berlin: Martin Schulz announced Wednesday he would step down as leader of Germany's centre-left Social Democrats and that he intended to serve as foreign minister in the next coalition government led by Chancellor Angela Merkel.

"I have decided to enter the government as foreign minister," he told reporters hours after clinching a hard-fought coalition deal with Merkel's conservatives.

Schulz tapped the party's parliamentary group leader Andrea Nahles to replace him as SPD chief, a role he himself held for just over a year.