It is now likely that Greece will be forced to hold repeat elections in mid-June.
And the public spending cuts agreed in return for bailouts from the EU, the IMF and European Central Bank will now be difficult to implement.
In a week's time, the new Greek government is supposed to redeem 436 million euros (£351m) of debt, held by private creditors who turned down a swap last month.
It must also recapitalise Greek banks that sustained heavy losses in that swap, which cut some 106bn euros from Greece's near- and mid-term debt of more than 350bn euros.
And Greece's previous administration had already promised its EU-IMF creditors that in June it would find another 11.5 billion euros ($9.3bn) in savings through 2014.
In comments widely quoted by Greek newspapers on Saturday, German finance minister Wolfgang Schaeuble said that if the new government did not meet its commitments the country would "bear the consequences."
"There can be no government of national salvation," said Alexis Tsipras, leader of Syriza, earlier.
"Signatures on the EU-IMF loan agreement are not a salvation but a tragedy," he added.
"We will exhaust all possibilities to reach an understanding, primarily with the forces of the left."
The anti-austerity Syriza party won 51 seats with 16.6% of the vote.
But the socialist Pasok party and the conservatives of New Democracy (ND) secured just 32.4% between them, down from 77.4% in 2009, according to interior ministry figures based on 95% of the vote.
More than 50% of Greeks voted for parties opposed to the cuts.
After 40 minutes of negotiations with New Democracy leader Antonis Samaras, Mr Tsipras said the two parties' views were diametrically opposed.
He demanded the cancellation of austerity measures many blame for deepening economic woes.
Mr Samaras was also meeting with the head of the former ruling party, now the third largest party, Pasok - but that meeting appears to have been unsuccessful.
New political forces in Greece include a nationalist party called Independent Greeks and the staunchly Stalinist Communist party.
The neo-Nazi Golden Dawn party is also set to enter parliament for the first time in almost 40 years.
It won 21 seats and about 7% of the popular vote, compared to less than 1% in the 2009 election
Golden Dawn's policies include placing landmines on the Turkish border to stem illegal immigration.
The rightwing New Democracy party scraped to first place in the election with 19.6% of the vote, its lowest ever share.
Earlier, Mr Samaras had said he would seek piece together a unity government to keep Greece in the euro and seek better terms from the country's EU-IMF creditors on growth.
"We are ready to assume the responsibility of forming a national salvation government with two exclusive goals: to keep the country in the euro and amend the policies of the memorandum," he said.
In contrast, Mr Tsipras said: "The parties that signed the memorandum (with the EU and the IMF) are now a minority.
"The public verdict has de-legitimised them."
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