ROME—Italian Prime Minister Matteo Renzi announced early Monday that he will tender his resignation in the afternoon after admitting defeat in Sunday's referendum.

According to projections, 59% of people who cast ballots on Sunday said 'no' to a plan backed by Mr. Renzi that would have overhauled Italy's legislature to make it easier to pass laws, including measures meant to make the country more competitive.

In response, Mr. Renzi said he will go to Italian President Sergio Mattarella Monday afternoon to tender his resignation.

"I take full responsibility for the defeat," he said in an address in the early hours of Monday from Palazzo Chigi, the premier's residence. The Italian people "have spoken in a clear and unequivocal way."

Italian voters delivered a stinging rebuke to their prime minister Sunday, rejecting proposed constitutional changes in a referendum on his leadership—handing a significant victory to populists in Europe's heartland.

The result means uncertainty in Italy, the European Union's fourth-largest economy, as the bloc struggles to revive growth and define its future. Mr. Renzi's resignation could clear the way for the formation of a caretaker government and, possibly, new parliamentary elections next year.

Among the biggest winners from Italy's vote is the anti-establishment 5 Star Movement, which campaigned against Mr. Renzi and his agenda, saying more radical change is needed. The party has called for a non-binding referendum on Italy's euro membership. It also wants to abandon EU budget strictures and has said it might favor printing a parallel currency.

Public-opinion surveys indicate that roughly 30% of Italians would back 5 Star candidates if parliamentary elections were held now. That puts it neck-and-neck with Mr. Renzi's Democratic Party and means it will have an influential voice and could even end up in power—an outcome that could ultimately threaten the integrity of the eurozone and its common currency.

Write to Deborah Ball at deborah.ball@wsj.com and Giada Zampano at giada.zampano@wsj.com

(END) Dow Jones Newswires

December 04, 2016 19:25 ET (00:25 GMT)