Mahathir Mohamad was on Thursday invited by Malaysia’s king Sultan Muhammad V to form the next federal government, a palace statement said.
Mahathir is to become the world's oldest elected leader at 92 after a shock victory in Malaysia's bitterly fought election.
He will be sworn in at 21:30 local time (13:30 GMT), according to the state news agency, Bernama.
The former PM came out of retirement and defected to the opposition to take on his one-time protégé, Najib Razak.
His historic win ousted the Barisan Nasional (BN) coalition, which has been in power since independence in 1957.
Jubilant Mahathir supporters filled the streets of the capital Kuala Lumpur as the victory became clear.
Mr Najib has said he will "accept the verdict of the people" but correspondents say a smooth transition to power is not a given after such a major political upheaval.
No single party within the coalition won a majority, so technically it fell to Malaysia's king to decide who formed a government.