Italian President, Giorgio Napolitano has asked centre-left leader Pier Luigi Bersani to form a government.
This follows a month of political deadlock after no party achieved a majority in the Italian election on February 24.
Bersani, who leads the Democratic Party, won enough votes to control the lower house but not the Senate meaning he cannot govern alone.
The 61-year-old former communist must now seek support from other parties to ensure the inauguration of a government in the eurozone’s third largest economy.
Italy desperately needs a government to end uncertainty as the banking crisis in Cyprus revives fears of a bout of financial market turmoil in the bloc.
A day before the announcement Bersani said he hoped he would be able to present a limited programme of economic and institutional reforms that could be backed by all factions in parliament.