Nepal's President Ram Baran Yadav is urging the country's bitterly divided parliament to select a new prime minister.
Leaders of various parties have been deadlocked for days while trying to establish a coalition government. No political party has a majority in parliament.
After the deadline for forming a coalition government passed Wednesday, the president told lawmakers to begin the process of electing a leader by simple majority.
No election date has been set.
Earlier this month Nepal's former prime minister, Jhalanath Khanal , resigned just three months into the job. The political stalemate in Nepal remains unresolved.
Mr. Khanal was elected to his post in February after 17 rounds of inconclusive parliamentary elections for a new leader. He said he would step down by August 13 if there was no significant progress made on the peace process or the formation of a power-sharing government.
Nepal's government has been deadlocked since former Prime Minister Madhav Kumar Nepal resigned in June 2010 under pressure from the Maoist opposition.
Maoists control most seats in parliament, but not enough to govern alone. They were allowed to rejoin the government following a 2006 peace agreement that ended a decade-long Maoist insurgency.
The peace process, however, has since been stalled by deep differences between the country's political parties. With both parties disagreeing on the shape of the new constitution and on the future of about 19,000 former Maoist fighters who are living in camps.