The plan to quell internal strife with a fast leadership reshuffle now seems to have had the opposite effect, however, with critics questioning the legal basis for Nahles' elevation to interim leader prior to her formal nomination by the party leadership committee.
In his second resignation in several days, the now-former head of the SPD Schulz gave his support to parliamentary group leader Andrea Nahles in an upcoming leadership election that will take place on April 22nd.
Martin Schulz resigned on Tuesday, hoping to end turbulence that has rocked the centre-left party since it agreed a coalition deal with Chancellor Angela Merkel's conservatives.
Paul Ziemiak, leader of the conservatives' youth wing, welcomed Merkel's readiness to set out her picks for ministerial posts before a CDU party conference on February 26.
With many SPD members harbouring misgivings about sharing power with Merkel again, the result of the vote, due on March 4, is wide open.
Opponents from the SPD to a new coalition have been campaigning under the slogan: "Join, and say no".
Tensions are also reported between him and Sigmar Gabriel, an SPD colleague who is now foreign minister.
Just 33 percent of German citizens said the SPD would be more successful under Nahles, while 52 percent did not expect this to be the case.
Under the prevailing statues of the SPD, the party's parliamentary vice-presidents are designated to take charge in the vacant period between the departure of an old and inauguration of a new party leader.
But three regional associations led by the powerful Berlin local party have objected to plans to install Ms Nahles as interim leader.
In a cartoon published on Tuesday, the Sueddeutsche Zeitung daily showed Nahles with a whip riding an SPD snail. Former European Parliament Speaker Schulz has been criticized for deciding to continue his joint governance with Merkel's Christian-Democratic Union.
That leaves open who from within the SPD may take up that post.
Germany has been without a formal government since the September 24 election and investors are anxious about a delay in policymaking, both at home and in the EU.
Merkel annoyed members of her Christian Democrats (CDU) by agreeing in the coalition talks to cede the finance ministry to the SPD. The SPD was at a record low of 16.5 percent, barely ahead of the far-right Alternative for Germany (AfD). Merkel's conservative bloc was also down 1 point at 29.5 percent. The SPD is in a hard situation after its support fell to historically low levels after September's parliamentary elections.