The election was widely seen as a referendum on outgoing Prime Minister Ulf Kristersson's promise to form a coalition with the far-right Sweden Democrats. However, the Left Party, one of the three parties in the left-wing bloc, said over the weekend it would back a candidate for parliament speaker from the rival Moderate party. Ms Andersson said that move undercut her attempt to build a government.
"Of course, I take the Left Party's message seriously, and based on that and the conversations I have had, I can conclude that there is currently no possibility for me to form a government," she told a press conference on Monday.
The speaker of parliament is now expected to task another party leader, likely Mr Kristersson, with trying to form a new government. Mr Kristersson currently leads a caretaker government. His right-wing bloc, which includes the Sweden Democrats, would also struggle to find a parliamentary majority. He said following the loss that he was ready to explore options to find a majority among "non-socialist" parties.
He is seen as wanting to court the Centre Party, which currently belongs to the left-wing bloc but previously sided with the right. However, Centre Party leader Elisabeth Thand Ringqvist has refused to be part of or support any government that gives influence to the parties on the far left or far right, leaving both blocs without an obvious path to a stable government.