Silvio Berlusconi said on Saturday that he would tender his resignation as prime minister on Tuesday, Italian news agency Ansa reported.
And Prodi's candidate for speaker of the upper house senate was elected to accompany a similar victory earlier in the day in the lower house.
A tense day of voting on Saturday ended with Franco Marini, a former union leader being elected by 165 votes to 156 for his rival Giulio Andreotti, the seven-time former prime minister.
The result mirrored Friday's voting when the second round was annulled after a confusion over spelling.
A repeat round was scheduled after three ballots were found where "Francesco Marini" had been written rather than "Franco Marini".
The votes had been seen as a key test for Prodi and his centre-left Olive Tree coalition as he strives to form a working government after his victory in the closest election in modern Italian history over incumbent Berlusconi.
The election of 73-year-old Marini came hours after the leader of the Refounded Communist Party, Fausto Bertinotti, was voted in as speaker of the lower Chamber of Deputies with 337 votes.
Bertinotti was elected more
comfortably in the lower house
While Prodi's allies have a workable majority in the lower Chamber of Deputies, they have only a two-seat majority in the senate over Berlusconi's conservative House of Freedoms alliance.
The vote to choose a senate president was seen as a test of his coalition's ability to remain united.
But the close votes and the surrounding tension reinforced the impression that, with such a slim majority, Prodi's forces will find it exceedingly difficult to push through legislation.
The acrimonious debates were broadcast live on national television and applause broke out in the chamber when acting speaker, the former president Oscar Luigi Scalfaro, announced Marini had finally been elected.
"I am very very happy," Prodi said. "We have settled in."
Prodi is now expected to get a mandate from Italy's president to press ahead with the formation of a new government.
However, it remains unclear precisely when this will happen as the president's term expires on May 18 and he has said he wants to leave the task to his successor.