Mana would take positions three and four.
It had taken "a while" to strike the deal because Mana members took time to "get their heads around what an alliance may mean", Mr Harawira said.
However an "overwhelming majority of members" were in favour, he said.
"We're looking forward to where we go from here."
Mr Kumar said he was "absolutely delighted to have come to an arrangement".
The alliance which will be known as the Internet Mana Party, represented "a credible choice for New Zealanders in the coming election" and it was hoped the alliance would encourage young New Zealanders to engage in the coming election and help reverse the declining trend for young voter participation.
Mr Kumar said the Internet Party's leader, a key issue in discussions between the two parties, would be announced on Thursday.
Mr Harawira said Mr Dotcom's looming extradition trial and whether Mana would support his efforts to remain in New Zealand had "not even come up once" during discussions over the last few weeks.
"It's not a matter on the table at all."
Hone Harawira and Vikram Kumar announcing the Internet Mana Party deal.
Mr Kumar acknowledged the Internet Party would contribute more money to the alliance than Mana but finances were only "a small part of resources" involved.
The Mana Party brought expertise and experience to the alliance while the Internet Party brought communications and other resources which Mr Harawira said would add up to a "new and very vibrant organisation I hope will shake up the political world'"
Mr Harawira acknowledged some Mana Party members were not happy about the alliance.
Senior member Sue Bradford has previously indicated she would leave the party if the deal went ahead.
Mr Harawira said he understood she remained a member at this point.
Asked whether the alliance may spell the beginning of the end for his party, Mr Harawira said: "I see this as being a brighter furture for Mana and I see us doing far better in this election than commentators might have thought three or four months ago."
Asked how many MPs he hoped the joint entity might take into Parliament, Mr Harawira said: "More than what we've got right now".
Commenting on the recent recording of he and Shane Jones discussing the prospect of Mr Jones returning to politics and Mr Harawira departing, Mr Harawira downplayed his comments as "a throwaway comment between close relations".
The marriage of convenience is designed to maximise the chances of both parties gaining MPs in the next Parliament.
Mr Harawira is the sole Mana MP and holding on to his seat is critical.
If he retains his Te Tai Tokerau seat on September 20, the new alliance will be able to claim its percentage of the party vote even if it falls under 5 per cent.
If the Internet Party were not tied to an electorate seat, it would have to get 5 per cent of the party vote on its own before getting seats in Parliament.
Prime Minister John Key said the alliance was about Kim Dotcom putting money behind a political party to try and stop himself being extradited to the United States, where he is facing copyright charges.
"I find that pretty odd but if people want to vote that, they are welcome to do it, but in the end everybody knows that if you vote that way, you are voting for a left-wing party."
Mr Harawira and Mr Dotcom were "the odd couple."
If Labour's vote was under pressure, as National's was in 2002, its supporters might go to them but he did not think it would become a very significant force.
Labour leader David Cunliffe Labour, like most New Zealanders "will be interested to see how that romance works out over time."
"For us it is a matter of observing and the New Zealand public will make their judgment on election day."
He said Labour 's Te Tai Tokerau candidate, list MP Kelvin Davis, would be running hard to win the seat from Mr Harawira.
"Kelvin Davis is a fine MP and our approach is to run hard in every one of the seven Maori seats. I want Kelvin Davis to win and I want all our Maori MPs to win."
He refused to say whether Labour would be prepared to work with Internet Mana, as he has done with the Greens and New Zealand First.
"We will allow the public their right to decide who comes to Parliament and when they have made their decision, our door will be open to those who want to change the Government."
He said Labour had ruled out working with Act or the Conservatives.
According to the memorandum of understanding struck between Hone Harawira's Mana Party and Kim Dotcom's Internet Party, their new joint entity will:
# Have Hone Harawira as its founding leader
# Develop a constitution, candidate selection rules and logo for the new party "that reflects the principles of the relationship"
# Establish a joint council comprising of the leaders and secretaries of both component parties to make decisions on behalf of the new party
# Submit a joint party list with Mana having the first, third and fourth spots and the Internet Party having the second fifth and sixth positions.
# Develop an agreed policy platform for the new party that all list and electorate candidates agree to vote for if they make it into parliament
# Allow each party to develop, promote and vote for its own policy platform
# Allow each component party to have its own policy spokespeople who may advocate their own party's policy
# Publicly and formally commit in writing that all candidates from both parties if elected to parliament will not support the formation of a Government with the National Party
# Run a national "Get out the Vote" campaign targeting the young, Maori and Pasifika voters
- additional reporting by Audrey Young
