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Further information: Welsh devolution referendum, 2011

The first page of the agreement states it "delivers a progressive, stable and ambitious programme for government over this Assembly term." Under its terms, Ieuan Wyn Jones will become Deputy First Minister and Rhodri Morgan will remain First Minister. Other posts will be divvied up among members of the two parties by Rhodri Morgan in consultation with Ieuan Wyn Jones.

The key policy proposals of the deal focus on increasing the amount of affordable housing in Wales through various incentives and schemes, investing in a comprehensive rail programme to link North Wales and South Wales more effectively, instituting a moratorium on community hospital reforms and promising to "agree and implement a new approach to health service reconfiguration" when "there is a local agreement on the way forward", a new commission to tackle climate change problems and alternative energy questions, and, most controversially, an agreement to hold a referendum on new law-making powers for the assembly in the vein of those presently granted to the Scottish Parliament. The text also states Plaid Cymru and Labour have agreed "in good faith to campaign for a successful outcome to such a referendum."

This last section has come under scrutiny from members of the Labour party, including Welsh MPs Paul Murphy, Don Touhig and also Kim Howells, Minister of State at the Foreign and Commonwealth Office, who claimed it will lead "nationalists to the gates of independence."

The referendum was held on 3 March 2011. The outcome was 'yes', with 63.49% of the participants for and 36.51% against; 35.2% of the electorate actually participated.

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