It is expected that the national Assembly of Armenia will vote for a new Prime Minister on may 1, Pashinyan will declare new parliamentary elections, which according to the Armenian Constitution could be held within two months.
After a nine-hour session, the chamber voted 45-55 against appointing Nikol Pashinyan, who was the only candidate nominated to replace the ex-president who resigned as prime minister due to the protests.
While addressing fellow politicians earlier in the day, Mr Pashinian warned that Armenia would be struck by a "political tsunami" if he were not appointed as prime minister.
The National Assembly is meeting in a special session today for the vote.
However, as a debate unfolded in parliament to discuss Pashinyan's candidacy for the vacant prime minister's post, it became clear the ruling elite was not willing to surrender power.
Earlier, the factions of the Armenian Revolutionary Federation/Dashnaktsutiun and Tsarukyan bloc issued statements pledging their support to Nikol Pashinyan.
Speaker of the Armenian Parliament Ara Babloyan said that this is an unprecedented phenomenon.More news: Trump says Israeli revelations prove he is '100% right' about Iran
Opponents of Sarkisian launched the protests, which brought thousands of Armenians out into the streets, saying the new system would have allowed pro-Moscow Sarkisian to remain the former Soviet republic's leader indefinitely.
After days of protests, veteran leader Serzh Sarksyan stepped down as prime minister last week.
Vadz Ghazaryan, an IT professional who immigrated to Canada from Armenia in 2014, said the protests have transformed the political landscape in his homeland, giving people hope that the corrupt political system led by the Republican Party can finally be reformed.
Reacting to the announcement, Pashinyan said: "With its discussions, the Republican Party has finally and irreversibly destroyed itself".
"A revolution of love and tolerance is continuing", he said, also urging people to turn out for a huge rally Wednesday evening as the crowds chanted "Nikol!"
Speaking to tens of thousands of supporters gathered at Republic Square in central Yerevan after the legislature's vote, Pashinian said all workers should stop going to their jobs and all students should stop attending their classes beginning on May 2.