"I will tender my resignation to the president of the republic this evening," Draghi told the cabinet, according to a statement released by his office.
"The national unity coalition that backed this government no longer exists," added Draghi, the former European Central Bank president who has been prime minister of a broad coalition since February 2021.
The confidence vote had become a focal point for tensions within Draghi's government as its parties prepare to fight each other in a national election due by early 2023.
The decision by the 5-Star party to boycott the confidence vote on Thursday had plunged Italy into political uncertainty and risked undermining efforts to secure billions of euros in European Union funds, tackle a damaging drought and reduce its reliance on Russian gas.
Draghi raised the stakes by saying he would not want to lead a government without 5-Star, who emerged as the largest party in the previous election in 2018 but have since suffered defections and a loss of public support.
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