"It's really chaos...It's shocking for many Social Democrats," said Stig-Björn Ljunggren, a political scientist and commentator known to have leftist sympathies.
"It's rare there are chaotic changes" in the Social Democratic Party, he told AFP, adding he had no idea who could be in a position to lead the party next.
Sahlin announced Sunday she would maintain her position until a special party congress scheduled for March, quitting after only four years at the helm of the party.
"I have played an important role. Now it's up to others to do so," she told reporters, calling her decision "fair and right for me and the party."
The 53-year-old career politician led a three-party left-wing opposition into the September elections in the hopes of becoming Sweden's first female prime minister.
However, she failed to prevent Prime Minister Fredrik Reinfeldt's re-election.
Worse, the Social Democrats, which for most of the 20th century was Sweden's governing force, suffered a catastrophic defeat and only narrowly maintained their position as the country's largest party.
For many commentators, the result marked the end of an era.
Although the party initially stood behind Sahlin, with few voices openly criticising her leadership, a portrait of a party in disarray quickly emerged in the Swedish press.
Her departure was thus "partly a surprise" Ljungren said, pointing out that the party traditionally changes leadership in a very routine, "bureaucratic" manner.
The problem for the party is that there has long been a lack of clear challengers for Sahlin's job -- and on Monday, several politicians tipped as possible successors said they were not interested in taking over.
The hugely popular Margot Wallström has repeatedly said she does not want the job.
Wallström who currently serves as the United Nations Special Representative on Sexual Violence in Conflict and is the former vice-president of the European Commission, made it clear Monday that she had not changed her position.
"I intend to complete my current UN mandate which will be evaluated in March 2012," she said, the Swedish news agency TT reported.
The Dagens Nyheter daily speculated she had her sights set on becoming the UN's first woman secretary general.
Charismatic former justice minister Thomas Bodström, who came second to Wallström in a poll of Social Democrats' favorite leadership figures, has also said he is not in the running.
Sahlin, a former minister and vice prime minister, was elected to the party leadership in March 2007.
Her time at the top is unusually short for a Social Democrat, especially when compared to former party heavyweights whose leadership could be measured in decades.
Swedish political legend Tage Erlander led the party -- and the country -- for 23 years between 1946 and 1969. Olof Palme led it from 1969 until his assasination in 1986, governing Sweden for 11 years during that period.
Sahlin's predecessor, Göran Persson, led the party for 10 years until he was defeated by Reinfeldt's centre-right coalition in the 2006 election.
Her departure is "unlike anything the Social Democrats in Sweden have seen before," said Peter Esaiasson, a political scientist at Gothenburg University.
However, he acknowledged that "at the European level, [this kind of crisis] is nothing new."
Long synonymous with Sweden's cradle-to-the-grave welfare state, the party easily garnered around 45 percent of the votes up until the mid-1990s. This year, it won just 30.6 percent.
As for the 2014 vote, "They don't stand a chance as it looks now,"
"People usually say the party is the pillar of the [Swedish] state," he said.
Now, he added, it "seems as if it can't even support its own weight."