The announcement was made after a joint meeting between Maharashtra Congress chief Ashok Chavan and his NCP counterpart Sunil Tatkare at the residence of Radhakrishna Vikhe Patil, the Leader of Opposition in the state Assembly.
The development comes a day after NCP supremo Sharad Pawar said that Congress president Rahul Gandhi is "a learner" and that the national party will see it's share of "achhe din".
"We have decided to come together for all the upcoming polls to defeat the ruling BJP-Shiv Sena government. This was a primary discussion. We will meet once again to deliberate on the seat-sharing strategy," Mr Chavan told reporters.
Stopping short of announcing a formal alliance, Mr Tatkare said, "Both parties have created an atmosphere that is conducive for an alliance. Our first focus is the bypolls to be held for the Bhandara-Gondia and Palghar seats."
The bypoll to the Bhandara-Gondia Lok Sabha seat in east Maharashtra was necessitated following the resignation of its BJP MP Nana Patole, who returned to the Congress.
The Palghar Lok Sabha seat, neighbouring Mumbai, fell vacant after the death of its BJP MP, Chintaman Wanaga, in January.
The schedule for the bypolls is yet to be announced by the Election Commission.
The Congress and the NCP are, however, yet to arrive at a consensus on the contestants for both the seats.
Bhandra-Gondia is the pocket-borough of NCP stalwart and former union minister Praful Patel, who had lost to Nana Patole in the 2014 general election.
Sharad Pawar had said on Wednesday that though weakened, the Congress was the only alternative to the BJP.
The NCP was part of the Congress-led UPA governments at the centre and in Maharashtra earlier.
The Congress-led Democratic Front (DF) government in Maharashtra, of which the NCP was a crucial component, had won three successive terms before it was dislodged by the BJP in the 2014 state assembly polls.
Both the parties had contested the 2014 assembly polls separately.
Interestingly, the Congress recently expressed "practical difficulties" in renewing its alliance with the NCP for the 2019 Lok Sabha election and Assembly polls in Maharashtra.
On the other hand, the Shiv Sena and the BJP do not see eye to eye with each other.
The Sena has been sulking ever since it was made to play the second fiddle to the BJP, which had won more seats than the Uddhav Thackeray-led party in the 2014 polls.
Following severe strains in ties with the BJP, the Sena had last month announced to contest the Assembly and Lok Sabha elections on its own.
Recently, Maharashtra Chief Minister Devendra Fadnavis had held a closed-door meeting with Uddhav Thackeray, triggering a speculation that the Shiv Sena was still keeping its alliance options open.