Georgian President Mikheil Saakashvili has accepted the letter of resignation from the country’s government in the wake of the October 1 parliamentary election.

The presidential website said that the current Cabinet will be fulfilling its duties until the new government is formed and presented to the new parliament within the terms set by the country’s Constitution.

Saakashvili’s United National Movement (UNM) lost in the October 1 parliamentary election and gained 67 out 150 seats in the parliament. The Georgian Dream coalition, led by billionaire Bidzina Ivanishvili, won the election and 83 seats in the parliament.

On Monday, Ivanishvili named his candidates to the key posts in a new Georgian government.

The majority of the president's executive powers will be transferred to the new prime minister under constitutional reforms that take effect in January.

With a solid majority in parliament, Ivanishvili is the favorite to become prime minister. Saakashvili will remain president until his current term - his last under constitutional term limits - ends in October 2013.