Leaders of main opposition blocs announced Sunday they will create a new united coalition party ahead of local elections, a move that upends the country's political structure.

Kim Han-gil, the head of the main opposition Democratic Party , and Ahn Cheol-soo, a businessman-turned-politician new to the political scene, said they will seek a union and aim for a transfer of power at the next presidential election.

The move was announced just months ahead of the June 4 local elections to pick a new Seoul mayor, and governors and council members of regional governments.

The leaders said the new party will abolish the controversial top-down nomination system starting in the June election. The nomination system has long been associated with bribes between those wanting nomination and the party.

"Both sides agreed to push for the creation of the new party as soon as possible and work together to achieve a transfer of power in the 2017 (presidential election)," the leaders said at a press conference at the National Assembly.

"The government and the ruling party have not repented nor apologized for their lies during the (past) presidential election and are trying to deceive the people again ahead of the local election," the leaders said, accusing the ruling party of breaking election pledges.

Ahn, who became popular for providing computer anti-virus programs for free, had run for president in the 2012 elections but yielded to the then major opposition party candidate. He is seen as still commanding a formidable following among voters who see him as a fresh figure who can reform the corruption-ridden national politics.

  His political steps were closely followed by the opposition, who want and need synergy, and the ruling party who worry that a union like the one announced Sunday will seriously challenge its standing.

The ruling Saenuri Party immediately denounced the coalition as "collusion" between an emerging party incapable of self-rehabilitation and a No. 1 opposition party desperate to pair up.

"Does mixing 50 degree water (with 50 degree water) make it 100 degrees?" ruling party spokesman Park Dae-chul asked in a press briefing at the party's headquarters. "It's totally illogical and self-contradictory."

The DP, however, said it plans to launch the new party by the end of this month after setting up a preparatory committee comprised of five members from each side.

"Because we won't be nominating local election candidates, the party's work has been immensely reduced, and it will be possible to establish the new party by the end of March," Rep. Choi Jae-cheon, the DP chief of strategy and public relations, told reporters.

Asked whether the new party could also embrace the minor opposition Justice Party and civic groups, Choi said the door isn't closed but no talks have taken place on the exact scope of the new party.

He, however, ruled out a merger with the minor leftist Unified Progressive Party, whose leaders have been accused, and some even convicted, of sympathizing with North Korea and its policies.

The DP is under fire from the ruling party for forming an alliance with the UPP ahead of the April 2012 parliamentary elections, which the ruling party claims helped North Korea sympathizers win seats in the National Assembly. (Yonhap)