Likud and Yisrael Beytenu will run together in the elections – forming a possible 50 MK bloc.
IDF Radio spoke with Likud MK Carmel Shma HaCohen, who confirmed the news.
Binyamin Netanyahu will head the new list, and Lieberman will be in the number 2 spot.
Netanyahu and Lieberman will hold a news conference at 8:00 p.m. Israel time and announce the move.
Education Minister Gideon Saar told IDF Radio that he is pleased with the move and that it will make Israel more governable. He explained that it would "sharpen" the contrast between the left and right wings in politics. There would now be "a national front" facing a leftist front, he explained.
Saar said he thought predictions that the party would receive 50 seats were exaggerated. He said Israel is facing tremendous challenges and that it is good to have as much unity as possible in the face of Israel's enemies.
Analysts said that the move reflects Netanyahu's concern that Likud's strength has eroded and that it may not wind up as the largest party in the next elections. Likud was not the largest party in the outgoing Knesset, either; it had one seat less than Kadima. However, the nationalist bloc was larger than the leftist-Arab bloc, and is expected to remain so.
There has been speculation that the new list would be named "Likud Beytenu" -- meaning literally, "Likud is Our Home" -- a combination of the names of the two parties.