Italian President Giorgio Napolitano dissolved the country's parliament Saturday, clearing the way for general elections expected in February.
Prime Minister Mario Monti resigned Friday after parliament approved his controversial budget.
Mr. Monti will lead an interim government until the elections. He is expected to announce on Sunday whether he will lead a centrist coalition that could return him to office in the New Year.
Former Prime Minister Silvio Berlusconi withdrew his support for Mr. Monti before the budget vote, and says he will be a candidate.
No election date was announced, but President Napolitano indicated the vote likely would be on February 24.
Mr. Monti is an economist and former European commissioner who took over Italy's government in November of last year. He and his Cabinet ministers have implemented economic austerity measures in the form of spending cuts and tax hikes, with the aim of making Italy “more trustworthy” and attractive to foreign investors.
Mr. Berlusconi, who has been Italy's prime minister three times before, says he intends to campaign on an anti-austerity platform, cut taxes and create jobs. His party has accused the Monti government of applying policies that “were too German-centric.”
Public-opinion polls show Mr. Berlusconi trailing a center-left alliance, led by Pier Luigi Bersani, that broadly supports Mr. Monti's economic program, but also promises to ease the economic pressure facing the poorest members of society.