Monti, a highly respected economist, was appointed prime minister at the conclusion of a series of meetings held between Napolitano and parties' leaders as well as Italy's former presidents.

He is expected to push through austerity reforms asked by the European Union (EU) to cut Italy's massive debt and regain market confidence after yields on its 10-year government bonds jumped over the 7-percent red line last week.

"I want to fulfill this task with great sense of responsibility and service towards our country. In a moment particularly hard for Italy, and troubled in Europe and in markets, Italy must meet the challenge of redemption," said Monti at a press conference soon after the appointment.

He added that Italy had to restart growing as "it is for our children to give them dignity and hope."

Earlier in the week, Berlusconi had lost majority at the parliament's lower chamber and promised to resign as soon as the austerity measures was approved by both the parliament's houses.

Xinhua