Malta faces new elections after its government collapsed on Monday over negotiations for next year's budget.
Prime Minister Lawrence Gonzi lost his one-vote majority after a dissenting MP reportedly voted against the budget bill in protest over transport reforms.
Parliament will be dissolved on 7 January and new elections are set to be held in early March, Mr Gonzi told journalists.
Mr Gonzi, a lawyer by profession, had been in power since 2004.
His 2013 budget proposal was defeated after Franco Debono, a member of the ruling Nationalist Party, withdrew his support for the bill.
The move was in protest over the government's decision to hand the management of Malta's bus service to a German operator, among other issues.
The Nationalist Party has governed Malta since 1987, apart from 1996-1998 when Labour was in power.
Mr Gonzi took office in March 2004, just before the small Mediterranean state entered the EU.
Four years later, his party won re-election by 0.5% of the votes cast, the slimmest margin in Malta's four-decade history.
The nation of 419,000 people gained independence from Britain in 1964.