Portugal's president, Jorge Sampaio, has invited the new leader of the country's Social Democrats to form a government.
The move follows the resignation of Jose Manuel Durao Barroso, who is to become president of the European Commission.
His successor, Lisbon mayor Pedro Santana Lopes, who is 48, said he would work to improve the lives of Portuguese people.
Mr Barroso had handed in his resignation last Monday and is heading a caretaker coalition government.
The opposition Socialists, who beat the conservative coalition in the European Parliament elections last month, had called for early elections.
The President's decision led Socialist Party leader Eduardo Ferro Rodrigues to hand in his resignation.
