Leader of Nepal's largest communist party named the country's new prime minister
A statement issued by the president's office said Oli will take his oath of office on Monday.
Oli will be leading a coalition government made up of his Communist Party of Nepal (Unified Marxist Leninist) and the Nepali Congress party, the two largest parties in Nepal.
It is his fourth time as Nepal's prime minister.
The last government headed by Pushpa Kamal Dahal collapsed on Friday after Oli's party, which had been a part of the coalition, withdrew its support to join the new partnership.
Oli would have to seek vote of confidence in parliament to continue in office within a month. The two parties in the new alliance have more than half the members in parliament required to prove their majority.
Oli, 72, was born in a village in east Nepal and has been involved in politics since he was young. He has a kidney illness and has had kidney transplant surgeries. He has made regular trips abroad for medical treatment.