Germany's Social Democratic Party (SPD) has said it will begin talks with Chancellor Angela Merkel's Christian Democrats (CDU) on forming a coalition, BBC News said.
Mrs Merkel's party won last Sunday's poll but it needs to form an alliance with either the SPD or the Greens to ensure a majority in parliament.
SPD chairman Sigmar Gabriel said party members backed the move at a meeting.
The CDU took about 41.5% of the vote. The SPD won 26%, the Greens 8.4%, and the former communist Left Party 8.6%.
Meanwhile, the German news agency DPA says SPD leader Peer Steinbrueck wants to withdraw from frontline politics.
Steinbrueck, 66, led the Social Democrats' election campaign but he will no longer hold a leadership role in the German opposition party, a party source told DPA.
"My political life will come to an orderly end," he is reported to have said at a closed-door meeting of around 200 SPD members in Berlin.
Steinbrueck used to be state premier in North Rhine-Westphalia.
A poll carried out for German ARD television earlier this week suggested that most voters wanted Merkel's Christian Democratic Union bloc to enter into a grand coalition with the Social Democrats.
has not yet indicated which parties she might reach out to in order to build a coalition building.
CDU parliamentary group leader Volker Kauder said that the party "has a clear mandate from voters to form a government". The outcome showed that "voters want Angela Merkel to remain chancellor" for a third term, he said.