Prime Minister Alexis Tsipras quit last night, calling for early elections just after completing seven months in office.
Tsipras submitted his resignation to President of Democracy Prokopis Pavlopoulos and asked for the soonest election date.
“I will go the president of the republic shortly to submit my resignation, as well as the resignation of my government,” Tsipras said in a televised address before meeting Mr Pavlopoulos.
“I want to be honest with you. We did not achieve the agreement we expected before the January elections.”
“I feel the deep ethical and political responsibility to put to your judgment all I have done, successes and failures,” he concluded.
After nearly a third of SYRIZA lawmakers refused to back the program in parliament last week, Tsipras lost majority.
He now hopes to return to power in a stronger position without anti-bailout rebels in his party.
The election date is yet to be set but earlier reports suggested 20 September.
Meanwhile, Greece will be run by a caretaker government ahead of the polls.