Prime Minister Tayyip Erdoğan and his cabinet formally resigned on Tuesday as expected, starting the process of forming a new government after winning a third consecutive term in office.
Erdoğan's AK Party won 49.9 percent of the vote, 326 seats, in Sunday's election, short of the 330 seats it needs to write a new constitution without the support of other parties in the 550-seat parliament.
Under Turkish law, Erdoğan must present a new cabinet to President Abdullah Gül within 45 days, which then needs to win a vote of confidence from the new parliament. The new cabinet is expected to be in place in July.
The challenges Erdoğan faces as he moves towards his second decade as prime minister range from unrest in neighbouring Syria to stalled European Union membership talks on the foreign front, while at home he has to cool an overheating economy, rewrite the constitution and solve the Kurdish problem.
Erdoğan has said the new government will have 20 ministries and four deputy prime ministers
Turkish newspapers say Finance Minister Mehmet Şimşek is expected to keep his job, while Economy Minister Ali Babacan is expected to be made deputy prime minister.
Markets hope the new government will take stronger measures, including fiscal tightening, to curb economic growth which has driven the current account into a danger zone and risks reigniting inflation.
Foreign Minister Ahmet Davutoğlu, the architect of Turkey's assertive foreign policy, is expected to stay, while Egemen Bağış, the chief negotiator for EU membership, is seen heading a new EU ministry.
In power since 2002, AK has overseen years of strong economic growth and has faced down the powerful military.
Erdoğan has said he will seek consensus to rewrite the constitution, which was drafted after a military coup in 1980.
There has been speculation that Erdoğan will try to move Turkey towards a more presidential system of government, with the aim of becoming president himself. Party laws do not allow him to run for a fourth term as prime minister.