Greek conservative party head Antonis Samaras has been sworn in as prime minister at the helm of a three-party coalition that will uphold the country's international bailout commitments.
The move ends a protracted political crisis that had cast grave doubt over the country's future in Europe's joint currency and threatened to plunge Europe deeper into a financial crisis with global repercussions.
Mr Samaras, an American-educated 61-year-old economist, was sworn in three days after his party won the second national elections in six weeks but without enough votes to form a government on its own.
His New Democracy party will join forces with the socialist PASOK party, which came in third place, and the smaller Democratic Left led by Fotis Kouvelis. Discussions on the lineup of ministers were expected to be completed by Thursday.
"I will ask the new government that will be formed tomorrow to work hard so that we can offer tangible hope to our people," Mr Samaras said.
Greek stocks rose marginally in response to the news, with Athens shares closing up 0.5%, limiting earlier gains.
The new prime minister will meet outgoing Finance Minister Giorgos Zanias, PASOK head Evangelos Venizelos and Kouvelis.
All three parties broadly back Greece's pledges to bailout creditors for further austerity and reforms, although they have pledged to renegotiate some of the terms for the rescue loans.
New Democracy and PASOK are also looking for an extension of at least two years in the deadlines for implementing fresh cutbacks.
Democratic Left leader Fotis Kouvelis went a bit further, saying that Greece should eventually "disengage" from the austerity commitments and "lift those measures that have literally bled society."
Greece has been dependent on the loans from other Eurozone countries and the International Monetary Fund since May 2010. In return, it has imposed deep spending cuts, slashed salaries and pensions, and repeatedly hiked taxes.
The measures have left the country struggling through a fifth year of recession, with unemployment spiralling to above 22% and tens of thousands of businesses shutting down.
Earlier hundreds of poverty-stricken Greeks queued in a central Athens park for free vegetables. Cretan farmers handed out some 2,700 packages of produce, in cooperation with the capital's municipal authorities.
Among the people lining up was Panayiota Sidera, 31, from Athens. She said she has been unemployed for two-and-a-half years and her husband is also out of a job. The couple is living on a 250 euro monthly disability pension and rent from an apartment they own, and has a 540-a-month euro loan instalment to pay.
"That's my predicament," she said, adding that the food handout "is helping people, and I'm grateful."
"The government should have been doing this years ago," she said.
Mr Zanias is to represent Greece at an upcoming meeting of Eurozone finance ministers.
The eurogroup talks "will be the first big battle on the revision of the bailout agreement, the creation of a framework that will allow us to move to positive growth and to combat unemployment which is the big problem of Greek society," Mr Venizelos said earlier in the day.
In Sunday's vote - and the previous, inconclusive May 6 election - angry voters strongly favoured parties promising to end the hardship by tearing up Greece's pledges for continued austerity and reforms.
However, the anti-austerity standard bearer - the radical left Syriza party - finished a narrow second in Sunday's election that gave New Democracy 129 of Parliament's 300 seats.