Turkish President Recep Tayyip Erdogan on Tuesday accepted the resignation of the cabinet of Prime Minister Ahmet Davutoglu after legislative elections, but asked it to stay on until a new government is formed.

Davutoglu had met Erdogan for one hour at his Ankara palace to discuss the future of the government after the ruling Justice and Development Party (AKP) lost its majority in parliament in Sunday's polls.

"Mr President accepted today the resignation of the cabinet that was presented by Mr Prime Minister Ahmet Davutoglu," Erdogan's office said in a brief statement.

"Mr President, who thanked the cabinet for its services so far, asked the cabinet to remain in charge until a new government is formed."

The resignation of the cabinet was widely expected as a procedural move after the elections.

It was not clear if Davutoglu was authorised by the president to embark on a tour of talks with opposition parties to form a coalition government.

The ruling Justice and Development Party (AKP) failed to win enough seats in the parliament after Sunday's elections, which dealt a blow to Erdogan's ambitions for more power and dragged the country into uncertainty.

Since it came to power in 2002, the AKP has ruled Turkey as a one-party government, with a big majority in the 550-seat parliament.

Observers say the most likely alternative is a coalition between the AKP and the right-wing nationalist MHP party.