Three parties say they have reached a deal to form a new centrist Austrian government, five months after an election was won by a far-right party that later failed in an attempt to form an administration.

The three biggest centrist parties in Austria's parliament have agreed to form a new coalition government, sidelining the far-right Freedom Party (FPO) even though it came first in September's parliamentary election.

Three moderate Austrian parties struck a deal to form a new government, moving ahead with a coalition which will need to make deep budget cuts in an economy trying to exit a second year of recession.