Sweden's parliament voted to oust prime minister Stefan Lofven in a no-confidence motion on Monday.
It gives the Social Democrat leader a week to either resign and hand the speaker the job of finding a new government, or call a snap election.
The nationalist Sweden Democrats had seized the chance to call the vote last week after the formerly communist Left Party withdrew its support for the centre-left government over a plan to ease rent controls for new-build apartments.
Mr Lofven's shaky minority coalition with the Green Party has relied on support in parliament from two small centre-right parties and the Left Party since a tight election in 2018.
With parliament deadlocked, it is not clear to whom the speaker could turn to form a new administration, while opinion polls suggest the centre-left and centre-right blocs are evenly balanced, meaning a snap election might not bring clarity.
A new government — or a caretaker regime — would only sit until a general election scheduled for September next year.
It is the first time a Swedish prime minister has ever been ousted by a no-confidence motion put forward by the opposition.