Italian Prime Minister Matteo Renzi has announced his resignation. His decision comes as exit polls suggest a large defeat in the referendum on cabinet-backed constitutional reform, which was held on Sunday.

"Tomorrow afternoon I will call a cabinet meeting and I will thank my colleagues for an extraordinary adventure, it has been a united, strong and compact team. I will then go to the Presidential Palace where I will tender my resignation to the president," Matteo Renzi said.

Italians voted in the referendum on whether or not the country should amend its 1948 constitution. However, local media showed "No" votes were at 59 percent and that "votes in favor" were at 41 percent. Renzi said the vote turnout exceeded all expectations.

His departure will likely plunge Italy into a new phase of political uncertainty and possible economic turmoil. The defeat is also believed to pave way for the fast development of populism in the country.