His decision comes three days after Italians decisively rejected his plans for constitutional reform in a major referendum.
Mr Renzi’s resignation was delivered to Sergio Mattarella, Italy’s president.
The 41-year-old confirmed the news on Twitter, writing: “Formal resignation at 7pm. Thanks to all and long live Italy.”
Mr Mattarella has asked Renzi to carry on in a caretaker capacity while he holds talks with the country’s major political parties.
The talks will begin tomorrow at 5pm GMT and are due to end on Saturday afternoon.
Mattarella is widely expected to ask a member of Mr Renzi’s cabinet, or a politician from his Democratic Party, to try to form a new government.
Elections are due in 2018 but many politicians are calling for them to be held earlier.
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