Update 8.30am: The centre-right coalition in Italy has won about 37% of the parliamentary vote, according to preliminary results from Sunday's election released by the country's interior ministry.
The 5-Star Movement has taken about 31%, with the centre-left coalition far behind with 23%.
With no faction winning a clear majority, the results early on Monday confirm that negotiations to form a government that can win a confidence vote in parliament are likely to be long and fraught.
The partial results show the right-wing, anti-immigrant League party of Matteo Salvini surpassing the establishment Forza Italia party of ex-premier Silvio Berlusconi.
The League captured around 18%, while Forza Italia had less than 14%.
The results confirm the defeat of the two main political forces that have dominated Italian politics - Forza Italia and the centre-left.
BREAKING: Preliminary results in Italy election give center-right coalition around 37 percent of the vote, 5-Stars 31 percent.— The Associated Press (@AP) March 5, 2018
Earlier: Election projections in Italy point to hung parliament
Election projections in Italy have shown a centre-right coalition that includes an anti-migrant party edging past the populist 5-Star Movement, but no single bloc or party with the support to win a majority in Parliament.
If confirmed by official results, the outcome could set the stage for weeks of political haggling to forge a new government
An RAI State TV projection from yesterday's election showed the centre-right bloc in front with 35.5% and the centre-left, which includes the Democratic Party leading the current government, lagging at 23%.
The anti-establishment 5-Star Movement had 32.5%.
Another projection that looked only at how parties fared had the 5-Star Movement snagging 31.8% of the vote, but far from the threshold it needed to form a government.
The anti-immigrant, eurosceptic League of Matteo Salvini had 15.9% of the vote and its main centre-right partner, former Premier Silvio Berlusconi's Forza Italia, came in at 14.2%. The Democratic Party had just 19.6%.
"Despite a stronger than expected performance, the M5S (Five-Stars) are still far away from securing an absolute majority," Wolfango Piccoli, a London-based analyst with Teneo Intelligence, wrote.
Mr Piccoli noted that Mr Berlusconi and Mr Salvini had forged a "gentleman's agreement" stating that if their bloc secured a majority of the vote, whichever of their parties received more support could pick Italy's next premier.
Mr Berlusconi cannot hold public office now due to a tax fraud conviction and tapped European Parliament President Antonio Tajani as his choice for premier. Mr Salvini wants the job for himself.
Populists have surged in Italy's election https://t.co/uMCHUwn8nwMarch 5, 2018
Like Mr Piccoli, others said the election appeared to have dealt Italy a hung Parliament - and weeks or even months of political negotiations to line up a governing coalition of rival forces appeared likely.
"Ungovernable Italy" was how Italian daily newspaper La Stampa headlined its election summary.
Political analyst Lorenzo Codogno of London-based LC Macro Advisors commented: "Financial markets are likely to take these figures negatively."
He added that a hung Parliament would make it "extremely difficult for a narrow mainstream coalition to have the numbers to govern".
How the seats finally are sorted out could determine if Italy is swept up in the eurosceptic and far-right sentiment that has emerged in much of Europe.
The campaigning in Italy was marked by neo-fascist rhetoric and anti-migrant violence that culminated in a shooting spree last month that targeted African migrants and injured six.
If you sum 5 Star Movement, League and Brothers of Italy you get to ~50%. All these parties toy/have toyed with the idea of leaving the euro. If true, this would be hugely symbolic. #Italyelection2018— Ferdinando Giugliano (@FerdiGiugliano) March 4, 2018
The 5-Star Movement in principle opposes allying with other parties in government, and wants to rule alone if it wins its first premiership.
But the 5-Stars' candidate for premier, 31-year-old Luigi Di Maio, has shown some openness to potential partners.
One of his chief aides, Alessandro Di Battista, in exultant remarks to supporters early on Monday, indicated they were open to talking to potential government partners.
With Mr Salvini gunning for the premiership himself, some pro-European analysts had envisioned a possible "nightmare scenario" of an extremist alliance among the 5-Stars, the League and the right-wing Brothers of Italy.
Steve Bannon, right-wing populist architect of Donald Trump's White House campaign, was in Rome this weekend, cheering on the populists.
"I think if they create a coalition among all the populists it would be fantastic, it would terrify Brussels and pierce it in its heart," Mr Bannon was quoted as saying in Sunday's Corriere della Sera newspaper.
PA & Digital Desk