Luigi Di Maio and League leader Matteo Salvini were expected to announce a "government agreement" and a nominee for prime minister following negotiations over the weekend, but on Monday Mr Di Maio revealed that more work was needed on the deal and that no names would be made public.
"We are writing what will be the government program for the next five years and it's very important for us to finalise it as best as possible, so we have asked the president for a few more days to definitively close the discussion," Mr Di Maio told reporters after meeting with Mr Mattarella.
Mr Di Maio, 31, announced that the finalised deal would be put to an online vote for M5S members.
Talks between Mr Salvini and Mr Mattarella took place late on Monday at the president's office.
Italy has been in political deadlock since an inconclusive March 4 election, which was dominated by concerns over a struggling economy, the refugee crisis and illegal immigration.
The M5S and the League have been negotiating a power-sharing deal since last Wednesday, when Mr Salvini's right-wing coalition partner, former prime minister Silvio Berlusconi, gave the green light for the pair to form a government without his Forza Italia (FI) party.
According to reports, the parties have agreed on rolling back increases to the age of retirement, while the M5S is willing to follow the League's hardline anti-immigration policies.
Mr Salvini and Mr Di Maio are also willing to make compromises over their flagship policies - the League's drastic drop in taxes and the M5S's universal basic income - which look tricky to reconcile in one of the eurozone's most indebted countries.
The League and the M5S must also agree on representation from the parties in the new government.
Mr Salvini's League won 17 per cent of votes in March, but it was part of a right-wing alliance including Mr Berlusconi's FI that garnered 37 per cent of the vote.
The M5S is by far Italy's largest single party after winning nearly 33 per cent of the vote.