Italian President Giorgio Napolitano is expected to dissolve parliament Wednesday after efforts to form an interim government failed.
News reports from Italy say early elections are likely to take place in April, only two years after the previous vote.
President Napolitano held talks with lawmakers from both chambers on Tuesday, as mandated by law before calling elections.
Italy plunged into the latest political crisis after a small party last month withdrew from Prime Minister Romano Prodi's center-left coalition.
The president and many political leaders supported forming a short-term administration and changing voting rules before holding new elections.
But Mr. Prodi's rival, opposition leader Silvio Berlusconi and other center-right party leaders, rejected all calls to support an interim government. Voter surveys showed that a center-right coalition would win the elections if they were held now.
The victory would return Mr. Berlusconi to the post of prime minister for the third time. He narrowly lost to Mr. Prodi in the 2006 election.
Italian electoral laws have been blamed for much of Italy's political instability.
Some information for this report was provided by AFP, AP and Reuters.