Former Italian prime minister Matteo Renzi resigned on Monday as leader of the centre-left Democratic Party (PD) after a bruising defeat in a national election.

The PD took just under 20 percent of the vote in Sunday's ballot, its worst result since its creation in 2007, despite presiding over a modest recovery in the euro zone's third-largest economy.

Beaten by the anti-system 5-Star Movement and a centre-right coalition dominated by the eurosceptic League, Renzi acknowledged the defeat at PD headquarters in Rome.

"It is obvious that I will leave the helm of the PD," said Renzi, who quit as prime minister when Italians voted against him in a 2016 referendum on constitutional reform.

READ: Chaos in Italy as parties vie for power following inconclusive vote

Despite his decision to stand aside, he said he expected his party to shun any coalition talks.

"The Italian people have asked us to be in opposition and that is where we will go," he said." We will never form a government with anti-system forces," he added, referring to the 5-Star and the League.

No one party or coalition came close to a working majority, but 5-Star and the League said they must be in government, as investors dumped Italian government bonds.

Party rivals complained Renzi had moved too far to the right and led with a domineering, autocratic hand, eventually leading to a small left-wing group splitting off last year.