President Toomas Hendrik Ilves has picked Taavi Rõivas, the Reform Party's current and second choice for prime minister, to form the next government.
Sven Mikser, the leader of the Social Dems, and Taavi Rõivas, the Reform Party's number one following the resignation of Andrus Ansip and the exit of Siim Kallas, were called in to meet with Ilves in Kadriorg this afternoon.
These two parties have made the most progress in mutual talks and command a majority of the seats in the 101-member Parliament. The division of ministerial posts or inclusion of other coalition partners has not been decided.
The story is being updated.