Greek lawmakers have failed to elect a new president in a final round of voting on Monday 29 December, meaning the country will head to the polls for an early parliamentary election.
Former European Commissioner Stavros Dimas, the only candidate on the ticket, failed to secure the votes needed to become president.
Greece will likely call an early election for February, a move that will send waves of uncertainty through the country's financial markets, as well as those of its fellow Eurozone members.
With a radical left-wing party topping the Greek opinion polls, the country's perilous public finances and nascent economic recovery will now face weeks of uncertainty.
The leftist Syriza party, which has called for the country's bailout agreements with the European Union and the International Monetary Fund to be annulled, has held a consistent lead in national opinion polls in recent months. While its advantage has narrowed slightly in recent weeks, it remains the front-runner.
Greece's main stock index fell 10.7% after Monday's vote, while the yields on Greek sovereign bonds soared above 9%.
The failure to select a new head of state comes at a critical time for Greece's economy, with the final round of bailout negotiations set for early in the new year. These will now be delayed while the Greek public goes to the polls.
Prime Minister Antonis Samaras had called on parliament to elect Dimas as the new president, amid growing uncertainty over the future of his ruling coalition.
Although Samaras remains confident his party would triumph in early elections, his conservative New Democracy party disagrees with the front-runners Syriza in a number of key areas, including the terms of the bailout and Greece's future within the Eurozone.