Spain's parliament voted to make Pedro Sanchez prime minister for another term on Thursday, ending a protracted deadlock after an inconclusive general election in July.

His Spanish Socialist Workers' Party (PSOE) reached separate deals with a number of regional parties to earn their backing, including a contentious bill on amnesty for Catalan separatists that has sparked protests across Spain.

Sanchez had 179 votes in favour and 171 against, with no abstentions.

His confirmation as premier ends months of uncertainty. Alberto Nunez Feijoo, a candidate with the conservative People's Party (PP), won the most seats but failed to secure enough support from other parties in his own bid to lead the country.

German Chancellor Olaf Scholz congratulated Sanchez on social media platform X.

"It is good that we can continue to work side by side," Scholz said. "We see many challenges in the world from a very similar perspective."

The amnesty bill, which was registered in parliament on Monday, has angered many Spaniards. It proposes exculpating politicians and activists who took part in an attempt to separate Catalonia from Spain that reached its apex in 2017.

As the vote was completed, some of the 400 protesters outside parliament shook barricades erected by police and shouted their dissent.

Javier, 25, of the youth group Revuelta linked to Vox, said protests would continue outside PSOE headquarters in Madrid on Thursday night.

Alberto Nunez Feijoo, whose PP won the most seats in the July vote, walked across the chamber to shake Sanchez's hand as leftist lawmakers applauded and cheered, while Vox party leader Santiago Abascal walked out.

Feijoo said he told Sanchez he was making a mistake for which he was responsible. (Reuters)