The largest single party in Sunday's election will be the Five Star Movement, which started from a comedian's blog in 2009 but now has more than 30% of the vote after focusing on corruption and anti-establishment feelings among much of Italy's population.
Unemployment is at 10.8% and economic growth in the eurozone's third-largest economy is lagging the average.
Matteo Salvini said Monday that the migrant issue was just "one problem" facing Italy and that the League has clear ideas on how to resolve that. "Be prepared for long and complex negotiations that will take months".
There was also a surge in support for the Northern League, led by Matteo Salvini, which is on track to beat Forza Italia and gain 17% of the vote to become the main conservative party in Italy.
If no party wins an overall majority, one scenario outlined by analysts could be a grand coalition between the PD and Forza Italia - a prospect that would reassure investors but risks spreading more cynicism and emboldening populists and the far-right.
"Your time's up!" After the activist was escorted out by police officers, Berlusconi cast his ballot and left the polling station. Addressing supporters, he said the 5-Stars only would hold such talks if those parties use the Movement's "methods" of "transparency and correctness". "We will assume the responsibility to build this government, but in a different way, talking with all the parties about what this country needs".
In terms of coalitions, the centre right also featuring Brothers of Italy (FdI) which got 4% was top with 36%, while the PD-led centre-left coalition was around 24% with the PD itself slumping to around 19% from pre-electoral polls of 23-4%.
After a stalemate following Italy's last election in 2013, it took more than two months to form a government.
"Ungovernable Italy" headlined daily newspaper La Stampa as the early numbers rolled in.
If there is no clear majority, President Sergio Mattarella could choose to leave in place the current centre-left government of Prime Minister Paolo Gentiloni. Gridlock will restrict much of what parties promised on the campaign they would do, which will come as relief to Italy's European neighbors and to many Italians.
"The euro was, is and remains a mistake", he said, adding however that holding a referendum over Italy's continued participation in the single currency was "unthinkable".
This so-called "Universal Wage" has helped the party draw massive support in the underdeveloped south, with pollsters predicting the 5-Star could sweep most first-past-the-post seats in regions below Rome.
"We did not anticipate this radicalization of the electorate who have turned for solutions to the 5-Star and League".
None of the major party leaders spoke in public on Sunday night as they awaited the final results.
Democratic Party member and outgoing parliamentarian Andrea Marcucci said that the voters had spoken "clearly and incontrovertibly" and that "The populists had won and the (Democratic Party) had lost".
Populist parties have made gains in Italy's parliamentary elections, though there was no clear victor, initial reports suggested.