Italian President Giorgio Napolitano has asked centre-left Senate Speaker Franco Marini to try to form an interim government to reform voting rules.
A confident Silvio Berlusconi wanted a snap election
The move follows the collapse of Prime Minister Romano Prodi's government last week following a Senate defeat.
Any temporary government would run the country with cross-party support ahead of an early general election.
The centre-right opposition, headed by ex-PM Silvio Berlusconi, had called for a snap election to end the impasse.
The leader of the Forza Italia party and other conservative politicians did not want the president to back a transitional government, amid polls suggesting a snap election could see Mr Berlusconi return to power.
However, the BBC's Christian Fraser in Rome says there is widespread agreement among senior senators that the country needs new electoral laws.
Under the current system, implemented by Mr Berlusconi during his time as prime minister, smaller parties with only a handful of seats hold the balance of power in parliament.
This is what caused the current crisis, our correspondent says.
Romano Prodi has stayed on in a caretaker capacity
The loss of the support of the small centrist Udeur party in the Senate left Mr Prodi's coalition without a majority and requiring the support of several unelected life senators.
In a subsequent confidence vote, Mr Prodi's government fell four votes short of the 160 it needed to survive.
Mr Prodi, who had led his coalition for 20 months, was asked to continue as prime minister in a caretaker capacity.
President Napolitano made his decision to seek an interim government after consulting political leaders from across the spectrum.