Germany's outgoing Chancellor Angela Merkel received her discharge papers from President Frank-Walter Steinmeier, relegating her to a caretaker role after 16 years at the country's helm.

Merkel, 67, who did not stand for re-election in the national ballot on September 26 after four terms in office, will act as caretaker chancellor until a new government is in place.

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The Social Democratic Party of Germany (SPD), which finished first in the election, is in talks to form a coalition government with the Greens and the pro-business Free Democrats (FDP) by December 6 that would oust Merkel's Christian Democratic Union of Germany after 16 years in power.

Under the constitution, a chancellor's term ends when the new Bundestag convenes. However, if no new government has been formed, the outgoing chancellor stays in office as caretaker until a successor is elected.

There are no formal restrictions on the acting chancellor's powers during this time. Still, Merkel is a consensus seeker and previous chancellors have not taken radical decisions during such windows.

There is no deadline for the formation of a government, and negotiations between election day in 2017 and Merkel being sworn in for her fourth and final term took a record 171 days.