Conte handed over his resignation to President Sergio Mattarella, according to a statement from the presidential palace.
The president will begin consulting with the leaders of the country’s main political parties on Wednesday afternoon, the statement said.
If Conte, who does not belong to a party, has enough support, Mattarella could ask him to form a new coalition.
Another option to break the dead-end street is to do the two-year early elections.
“The President of the Republic is presenting his decision and has asked the government to remain in office for the management of ordinary affairs,” the statement read.
If Conte receives the mandate, he will likely be looking for a broader coalition and adding five more senators.
Without a majority in the Senate, Conte would struggle to pass effective legislation in a time of crisis for the European nation, which had suffered years of political instability amid the pandemic, in addition to new economic challenges.
Italy has experienced several political crises since the end of World War II and held very quick elections before incumbent governments completed their election period. Conte is the country’s 66th leader in 75 years.
Its coalition, formed in 2019, is led by the center-left Democratic Party (PD) and the anti-establishment Five Star Movement (M5S). Despite major political differences, the unusual alliance prevented quick elections that could benefit the far-right league party.
CNN’s Stephanie Halasz contributed to this report.