Mr Berlusconi, who clung to his premiership disputing election results, is expected to hand in his notice to President Carlo Azeglio Ciampi, more than three week's after the general poll.
This will open the way for Mr Prodi, who won by only a narrow margin, to receive a mandate to form a centre-left government.
The centre-right leader was left with no choice but to quit after the new parliament on Saturday elected speakers for the lower and upper houses who are both from Mr Prodi's centre-left coalition -- communist Fausto Bertinotti and Franco Marini of the centrist Margherita party.
Mr Berlusconi occupied the prime minister's office for the longest continuous period for half a century.
He was renowned for his verbal excesses, repeated brushes with the law, pro-Americanism, domination of the media and colossal wealth.
Italy's political transition is already underway, and the two speakers have made it clear they want dialogue between the parties that contested the April 9-10 general election, the closest in living memory.
Meantime, the Italian president's term expires on May 18, and Mr Ciampi has expressed a desire for his successor to preside over the new government.
Media reports have suggested former Prime Minister Massimo D'Alema as the centre-left's favoured candidate, according to the BBC, however Mr Berlusconi has mentioned a member of his own government as the centre-right's possible choice.
The new president will be elected at a joint sitting of parliament.
While the centre-left wants Mr Ciampi to ask Mr Prodi to form a government before seeking parliamentary approval, Mr Berlusconi claims that is the task of the next president.
Mr Prodi has vowed to overhaul government finance, improve the tax system and reintroduce inheritance tax for the country's wealthiest people.