The outgoing premier told a news conference that he took "full responsibility" after his government's constitutional reform was rejected by close to 60 per cent of voters, adding that the Italian people had spoken "in a clear, unequivocal way".
"We took this reform to the vote, we weren't convincing, but we leave with no regrets," Mr Renzi told reporters.
"As was clear from the start, my experience in government finishes here... I'm proud of the opportunity my government gave the citizens to express themselves about the reform. Many people came closer to the Constitution (as a result)."
The premier met with President Sergio Mattarella at the Quirinal Palace on Monday morning, where the two spoke for over an hour according to sources within the ruling majority.
One of the possible outcomes is that Mr Mattarella will choose another party member to form a caretaker government to pass the budget bill and a new election law.
Finance Minister Pier Carlo Padoan, Cultural Minister Dario Franceschini and Senate speaker Pietro Grasso have been mentioned as potential heads of a caretaker government.
Reform Minister Maria Elena Boschi said the government would work "to serve institutions" and pass its budget bill.
"Pity. We had imagined waking up to something different: simplified institutions in Italy, a stronger country in Europe," Ms Boschi wrote on her Facebook page.
"It didn't go that way. The No vote won, full stop. Now to work to serve the institutions. We'll secure this budget bill.
“Then we'll publish a summary of the many things this government has done. To all the committees, to all the friends that gave us a hand, thank you. We'll decide together how to start again, once the disappointment is over. A hug."
