The Interior Ministry assigned Prodi's coalition, ranging from Catholics to communists, four of six Senate seats chosen by Italians abroad, giving him a total 158 seats to Berlusconi's 156.
In the 630-member lower house, called the Chamber of Deputies, Prodi received 340 seats after winning a 25,000-vote margin out of 38 million votes cast.
Prodi said his government would be for all Italians, "even those who didn't vote for us."
"Today we turn a page," he said, according to the Associated Press. "We leave behind the sourness of long and difficult electoral campaign. We need to start immediately to repair the tears that were produced in the country."
Berlusconi, however, refused to concede defeat, saying, "Nobody now can say they have won."
He said results from the overseas vote had not been decided and the elections were riddled with "irregularities."
Berlusconi suggested Italy form a "grand coalition" like Germany if final results show neither side winning both houses of parliament.
The Interior Ministry said 1.1 million votes had not been taken into consideration in the lower house vote because they were unreadable or had been left blank, and of those, 43,028 had been disputed. Berlusconi said he wanted those votes reviewed, reported Reuters.