(CNN) Italian center-left Prime Minister Matteo Renzi said he will resign on Monday, after conceding an "extraordinary clear" defeat in an Italian constitutional referendum.

"Tomorrow the President of the Republic will have a meeting with me and I will hand in my resignation," Renzi said. "I take on full responsibilities for defeat and so I say I lost, not you," he told supporters.

The defeat of the referendum was resounding, with nearly 60% of voters saying "no" with a high turnout of nearly 70%.

The result is considered a win for eurosceptic populist and nationalist parties in Italy which campaigned heavily against Renzi and his promise to stimulate Italy's sluggish economy.

The 'No' campaign was spearheaded by the anti-establishment Five Star Movement party, led by Beppe Grillo , which is expected to make substantial gains if a general election is called.

"When you lose you cannot pretend that nothing has happened and go to bed and sleep. My government ends here today," Renzi said.

More than just the constitution?

Formally, the vote was a referendum on whether or not the country should amend its 1948 constitution.

Renzi's intention was to reduce the power of the upper house of the Italian Parliament, the Senato, by cutting its numbers from 315 to 100 -- making it more of a consultative assembly.

Proponents of the referendum said that the goal was to make the job of governing Italy less complicated and reforms would help revive the nation's lethargic economy.

However, critics claimed the reforms would impact the constitution's checks and balances.

Elly Schlein, an Italian member of the European Parliament, said the proposed reforms would have transferred too much power into the hands of the ruling party.

"It was shifting power from the regions to the center in a really unbalanced way," she said. "It was a dangerous reform for the roots of our democratic system."

However, the referendum was widely thought to act as a litmus test for the rising wave of populism spreading in Europe , and the chance to register discontent with the current government.

This, according to Schlein, was Renzi's "completely unnecessary" mistake. She said that personalizing and dramatizing the vote meant that many of the people who voted 'No' -- particularly the younger voters -- did so for political reasons beyond the text of the reform and its consequences.

"The vote was transformed into a vote on himself and his government," she said.

What happens now?

Italy's President will decide what to do next.

He could piece together a government out of the current Parliament or call for a general election in which Beppe Grillo's Five Star Movement party is expected to extend populist gains.

Grillo, the entertainer-turned-politican -- known for his unruly language and mop of silver hair -- campaigned heavily for a "no" vote on constitutional reforms. He made a name for himself on Italian TV in the 1970s and 1980s and capitalized on his show-business bravado to promote an anti-establishment movement spanning both the left and right of politics.

Foreign observers fear that if Grillo comes to power in an early election, he'll call a referendum to scrap the euro, go back to the Italian lira, and perhaps even follow Britain out of the European Union.

"They have long promised to hold a referendum on Italy's membership of the single currency," said Vincenzo Scarpetta, senior policy analyst at think tank Open Europe.

Celebrations from the right

The result was also lauded by one of Italy's leading right-wing politicians, Matteo Salvini, whose anti-immigrant party will seek to make gains in a general election.

The conservative leader of the Northern League is known to be a vocal supporter of Italian fascist leader Benito Mussolini. In February, Salvini praised the Italian dictator for doing "so many good things."

Viva Trump, viva Putin, viva la Le Pen e viva la Lega! https://t.co/r8FXztp9Am — Matteo Salvini (@matteosalvinimi) December 4, 2016

"Long Live Trump, long live Putin, long live Le Pen and long live the League!" he said in a tweet.

France's National Front party leader and fellow eurosceptic Marine Le Pen also took to Twitter.

"The Italians have rejected the EU and Renzi. We must listen to this thirst for the freedom of nations and for protection!" she said.

Les Italiens ont désavoué l'UE et Renzi. Il faut écouter cette soif de liberté des nations et de protection !MLP #referendumcostituzionale — Marine Le Pen (@MLP_officiel) December 4, 2016

What does it mean for the banks?

There are fears the results of the vote could cause more uncertainty in the country's banking industry

JUST WATCHED Banks on edge ahead of Italian referendum Replay More Videos ... MUST WATCH Banks on edge ahead of Italian referendum 02:35

Italy's banks have suffered for years from high costs and low returns. Among the weakest is the world's oldest operating bank, Monte dei Paschi (BMDPF) . It needs five billion euros after failing a test of its financial health earlier this year. Its stock has fallen by more than 80% in 2016.

Investors, fearful of the political turmoil, could demand a much higher price for providing the money some banks urgently need. Banks might then be unable to pay that price or find willing backers, leaving them in need of a state bailout.

Italy's economy, which has been stuck in neutral for decades, is also likely to suffer. Renzi's government had embarked on a series of reforms aimed at boosting growth and prosperity.

Many of those are incomplete or still in the pipeline, and progress is now likely to stall. New elections could take place, but they may be many months away. Economists expect growth to weaken sharply next year.