Uhuru Kenyatta from Kibaki's coalition and Musalia Mudavadi of Odinga's party were named deputy prime ministers.
William Ruto, a senior opposition figure despised by Kibaki supporters who blame him for attacks on the president's Kikuyu tribe during the crisis, was appointed agriculture minister.
Ruto, who hails from the Rift Valley, which is Kenya's agricultural breadbasket, denies any wrongdoing. John Michuki, a Kibaki ally equally disliked by Odinga supporters, was named environment minister.
Sunday's announcement brought relief and wariness to Kenyans, long used to the same cast of politicians enriching themselves from the public coffers.
Celebrations broke out in Nairobi's Kibera slum, an Odinga stronghold. But some feared the 41-member cabinet, which is the country's biggest, would prove too expensive.
"It's laughable that a country like ours, that needs to move forward yesterday, will spend so much money on the cabinet," said Koki Muli of the Institute for Education in Democracy.
The new government line-up includes several politicians accused of corruption in past administrations.
"I doubt they will be able to work together, since they tried and failed before, but I hope they will. This country is suffering," said labourer John Muchiri.
Odinga was in Kibaki's first cabinet after his election in 2002, but they fell out over a 2005 constitutional referendum.
Odinga, a 63-year-old former political prisoner and son of an independence hero, has accused Kibaki, 76, of reneging on a deal to make him prime minister in 2002. That sense of betrayal drove Odinga's challenge at the 2007 poll.
The two men must now get down to the contentious work of drafting a new constitution within 12 months to address the long-standing and divisive issues of land, wealth and power.
