Making the announcement at a press conference here, AAP state incharge Sanjay Singh said Aam Aadmi Party and Lok Insaaf party, floated by the Bains brothers, will contest the 2017 state polls together.
He said the decision, which was taken in presence of AAP convener Arvind Kejriwal, was the result of several rounds of talks with the Bains brothers, and expressed confidence that his party will win more than 100 seats in the coming elections.
Singh said Simarjeet Singh Bains and Balwinder Singh Bains, MLAs from Ludhiana, had raised voice against drug mafia, sand mafia and river water issue through their Lok Insaaf party.
Former Rajya Sabha MP Navjot Singh Sidhu had floated the non-political front Awaaz-e-Punjab on September 8. Besides him, the Bains brothers and former Indian hockey captain Pargat Singh were the members of the party.
Simarjeet Singh Bains is an MLA from Atam Nagar while his elder brother Balwinder Singh Bains represents Ludhiana South seat.
When asked about Sidhu, Simarjeet Singh Bains said that he respected the leader like his elder brother.
"I respect him (Sidhu) and will always do," he said, adding that Sidhu would meet the media soon to clear his stand.
When asked whether Pargat Singh would join Congress as per reports, Simarjeet said, "I do not think he (Pargat) will go with Congress. We will try to bring him into AAP fold."
"There was no politics and self interest involved in this alliance. This alliance is pious. It was made in the interest of Punjab," he said.
AAP's Punjab convenor Gurpreet Singh Ghuggi said the party had always been open to alliances.
"There is no restriction on alliance in party's constitution. This party's (Lok Insaaf Party) mission is same as ours," he said.
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Meanwhile, AAP leader Sanjay Singh said the newly-formed alliance had the common target to "throw Congress and Badals out of the state and liberate it from corrupt parties."
Singh also criticised Congress state chief Captain Amarinder Singh for "inducting tainted leaders of other parties into its own fold", just to get Chief Minister's post.
Simarjeet Bains pitched in by saying that Congress was "responsible for massacre of 1984 and looting waters of Punjab."
Amarinder Singh himself invited then Prime Minister Indra Gandhi to start work of Satluj Yamuna Link (SYL) and the Badals acquired land for the purpose, he alleged.
Bains said during the Akali rule, Punjab witnessed desecration of Sri Guru Granth Sahib and innocent Sikhs were tortured by the government.
Sanjay Singh asserted that AAP was firm on its stand that the water of Punjab belonged to the state, and that it had no extra water to give it to any other state.
