But where did it all go wrong? Here are the key dates that has led to this current stalemate.
Two-party hegemony shatters
The results of the last election in April show how fractured Spanish politics has become.
Since the early 1980s, power in Spain had alternated without interruption between the Socialists and the conservative Popular Party (PP).
But December 20, 2015 put an end to that when two new parties, centre-right Ciudadanos and far-left Podemos, entered parliament for the first time.
Prime Minister Mariano Rajoy's PP won the most seats but lost its absolute majority in Spain's 350-seat parliament and was not able to cobble together a governing coalition.
Pedro Sanchez' Socialists, which came in second but also lost ground, reached an agreement with Ciudadanos but this was not enough to form a government.
Due to the political impasse, fresh elections were held on June 26, 2016. The PP gained ground but still fell short of an absolute majority and political paralysis persisted.
Rajoy sworn in for second term
Rajoy was finally sworn in for a second term as prime minister on October 29, 2016, putting an end to a 10-month spell without a government.
That was because Ciudadanos voted for him in a confidence vote and the socialists abstained.
Weeks earlier, the socialists had ousted their leader Pedro Sanchez who had steadfastly refused to back Rajoy's attempts to form a government.
Rajoy's minority government managed to pass its budget in 2017 and 2018 by making generous concessions to a Basque nationalist party and regional parties from Spain's Canary Islands.
Sanchez ousts Rajoy
Sanchez, who made a stunning political comeback after being ousted, winning his party's primaries in May 2017, became prime minister after ousting Rajoy in a no-confidence motion in parliament on June 1, 2018.
He had brought the confidence motion after the ruling PP was found guilty of benefiting from illegal funds in a massive graft trial.
Rajoy was the first prime minister in Spain's modern democratic history to be ousted by parliament after losing a confidence vote.
Sanchez won the subsequent vote with the support of a hodgepodge of different formations, including Podemos, two Catalan separatist parties and a Basque nationalist party.
Sanchez budget rejected
Sanchez's minority government submitted a left-leaning budget with Podemos which boosted social spending, in the hopes of governing until the end of the current legislature in mid-2020.
But talks with Catalan separatist parties, whose demand for a legally binding independence referendum is unacceptable to Sanchez, broke down.
Without their much-needed votes, the budget was rejected in parliament on February 13 and Sanchez later called early elections for April 28.
Sanchez won the vote but with only 123 deputies out of 350, he was forced to form alliances with other parties to govern.
But after four months of on and off contacts, his negotiations with Podemos, the Socialist party's bitter rival, collapsed and the PP and Ciudadanos refused to help him to form a minority government by abstaining in a confidence vote.
On Tuesday, Sanchez threw in the towel, blaming the opposition for the failure to reach an agreement.
“Spain is bound to hold new elections on November 10,” he told a news conference after King Felipe VI concluded there was no candidate with enough support to form a government.
“I tried by all possible means but they made it impossible for us,” he added.