Rome (CNN) -- Italian Prime Minister Mario Monti handed in his resignation Friday to President Giorgio Napolitano, the Italian government press office said.
The move comes after Parliament approved a budget by a vote of 309-55, with five abstentions, said ANSA, the state-run news agency.
Monti will outline his plans Sunday but will not say until afterward whether he plans to run in elections expected to be held February 24, ANSA said, citing "sources."
An economist and former European commissioner, Monti was appointed by Napolitano to fill former premier Silvio Berlusconi's place after he resigned last year under pressure for failing to control Italy's debt and a series of scandals.
Since then, international investors have displayed confidence in the country's finances. Italy's borrowing costs have fallen this year on Monti's efforts to bring down borrowing and the improved sentiment generated by the European Central Bank's conditional scheme to buy bonds of struggling sovereigns.
Berlusconi has criticized Monti's austerity policies as damaging to the country. Berlusconi's party, the People of Freedom, is the largest in Parliament.
While Monti's economic reforms have been popular with investors, earning him the nickname "Super Mario," the measures have not pleased the Italian public, although protests have been more muted than in Spain or Greece.
Italy is in a recession, and further belt-tightening will be unpopular with its citizens.
The unemployment rate in Italy rose to 11.1% in October, marking a 13-year high, and the Italian economy has contracted for five consecutive quarters. As of the third quarter, its economic growth was down 2.4% from a year earlier.
However, investors have welcomed Monti's effort to cut down on the nation's debt, and Italy's borrowing costs have fallen dramatically since the country made economic changes. After drifting above 7% a year ago, the yield on Italy's 10-year government bond has fallen to about 4.5% recently.
Monti's term was originally set to expire in mid-2013, but his earlier departure is expected to bring elections forward. Elections must be held within 70 days of the dissolution of Parliament.
Berlusconi has announced that he intends to run for re-election in the new year.