Prime Minister Boyko Borissov's centre-right party won the most seats in this month's election but fell well short of a majority.
Bulgaria seems posed for fresh parliamentary elections after the country's main opposition party said it was unable to form a government
The new anti-establishment party, There Is Such A People (ITN), had received a surge of support in this month's vote, which left no party with a majority.
The populist party - led by singer and TV host Slavi Trifonov - surprisingly finished second in the polls behind only Prime Minister Boyko Borissov's centre-right GERB party.
But on Tuesday, Trfinov confirmed in a Facebook post that ITN "does not have the necessary number of MPs to form ... a stable government".
GERB had already failed to form a government after holding coalition talks last week, paving the way for early elections in Bulgaria this summer.
PM Borissov has already stated that he will not stand to lead the country's next government and "divide" the nation.
Borissov has defended the current Bulgarian government's achievements in the areas of income and infrastructure.
But his GERB party lost a number of seats amid public frustration over political corruption in Bulgaria.
Riding the wave of widespread protests in 2010 was ITN - who won nearly 18% of the vote - and two smaller anti-graft parties, "Democratic Bulgaria" and "Stand up! Mafia Out". But together, the three parties have only 92 MPs in a parliament of 240 seats.
Indeed, Trifnov has criticised other traditional political parties in Bulgaria traditional parties, alleging corruption.
"The proposed support [we have] is from political entities that are harmful, greedy, and proven to be compromised," Trifanov said on Facebook.
"What they offer is not support, but dependence," he added.
The failure of ITN to form a government now means Bulgarian President Rumen Radev - a frequent critic of PM Borissov - must now mandate a third party of his choice to form a government.
Trifonov said he would nominate chess champion, Antoaneta Stefanova, as prime minister.
But the chances of her success are slim, analysts say, and the expectation is that President Radev will appoint an interim government and call a new election within two months.