Iraqi President Jalal Talabani has designated Jawad al-Maliki, a Shi'ite, as prime minister and asked him to form a government.
The move Saturday breaks a four-month political impasse over the nomination of prime minister.
U.S. Secretary of State Condoleezza Rice Saturday commended the move, calling it an "important milestone" in the formation of a permanent government.
Talabani made the announcement during a parliament session that approved nominations for government posts. Shi'ites nominated al-Maliki Friday.
In Saturday's session, Talabani, a Kurd, was elected to another term as president, while a Sunni Arab, Mahmoud al-Mashhadani, was elected parliament speaker.
In other developments Saturday, the U.S. military says a roadside bomb killed four U.S. soldiers who were on patrol south of Baghdad.
Elsewhere, Iraqi police say two people were killed and at least 10 others wounded when two roadside bombs exploded within minutes of each other near Baquba.
Some information for this report was provided by AFP and Reuters.