In a nationally televised address, an emotional Renzi said he accepted full responsibility for the defeat and that he would meet with President Sergio Matarella on Monday.
According to the government's official Referendum 2016 website, 59.1% of eligible voters opted for "No" in the national referendum on constitutional reform, against 40.9% wishing to accept the changes.
The European single currency, which had traded around 0.3% lower against the U.S. dollar at 1.0629 in early Asia dealing, weakened a further 1.5% to 1.0518, the lowest since March 2015 as Renzi spoke on Italian television. The currency pared some of those losses to trade at 1.0560 by 7:00pm Eastern.
Early indications from U.S. futures prices suggest the Dow Jones Industrial Average will fall around 50 points at the opening bell Monday, with a 9 point decline for the S&P 500 and a 30 point slip for the Nasdaq.
Matarella has a number of options to consider when Renzi offers his formal resignation, including asking the Party Democratico (PD) leader to reshuffle his cabinet and form a new government.
He could also ask another lawmaker to lead a new government with a slimmed-down mandate to guide the country to its scheduled national elections in 2018 and pass an already-delayed 2017 budget, or he could simply dissolve parliament and ask for early elections next year.
The various options are unlikely to offer support for investors in the country's beaten-down banking sector, however, where Italy's third-largest lender, Monte dei Paschi di Siena (BMDPY) , is attempting a €5 billion debt-for-equity swap it hopes will shore up its ailing balance sheet and avoid a government-led rescue that could wipe out subordinated and senior bondholders.
According to International Monetary Fund figures, around a third of the €600 billion in debt issued by Italian banks, including half of the €60 billion in subordinated bonds sold, are owned by Italian retail investors.
Under new banking sectors rules recently put in place at an EU level, any government-led rescue would require a bail-in of junior creditors, but analysts worry such a move could destabilize the country's financial system as investors pull cash out in order to avoid involuntary contributions to potential bailouts.
