Italian President Carlo Azeglio Ciampi is holding formal talks with political leaders Thursday, the first step in forming a new government.
Prime Minister Silvio Berlusconi resigned Wednesday, two weeks after his center-right coalition suffered a crushing defeat in regional elections, losing 11 of 13 regions.
One party pulled out of the coalition last week and another has threatened to also drop out.
The president is expected later this week to ask Mr. Berlusconi to form a new cabinet.
Earlier, the prime minister told parliament he is stepping down with plans to form a new and stronger coalition.
He praised the outgoing government for what he called its "secure leadership" over the past four years which he says increased Italian prestige on the world stage.
Some information for this report provided by AFP and AP.