Greek Prime Minister George Papandreou and opposition leader Antonis Samaras, who met late on Sunday for talks on a future coalition government, announced early on Monday that Papandreou will resign from his post and immediate elections will be held.
The two major political parties - Papandreou's PASOK party and the opposition New Democracy party - who agreed to set up a coalition government, announced that early elections could be tentatively scheduled for February 19, 2012, the finance ministry said.
The new prime minister's candidacy is yet to be agreed, but Deputy Prime Minister Evangelos Venizelos, who is also the finance minister, will keep his post.
Greek media named three people as possible candidates to succeed Papandreou. All of them served as the country's representatives in the European Union.
The possible successors are former vice president of the European Central Bank Lukas Papademos, European Ombudsman Nikiforos Diamandouros and former European commissioner Stavros Dimas.
The name of the new prime minister is expected to be announced later on Monday.
International pressure and a looming collapse of his government last week forced Papandreou to abandon his plans to hold the referendum on the new 130-billion-euro ($179 billion) rescue package for Greece, which was approved by euro zone leaders October 26.
Without loans from EU and IMF lenders, which have been frozen over political uncertainty, Greece may default on its 360-billion-euro ($495 billion) debt in the coming weeks, media reports said.