Mr Otari will stay on as caretaker prime minister The Syrian cabinet has resigned, state-run television has said.
President Bashar al-Assad accepted the cabinet’s resignation following a meeting on Tuesday.
The resignation is the latest concession by the government aimed at curbing more than a week of mass protests.
President Assad is expected to address the nation in the next 24 hours to announce he is lifting the emergency law and restrictions on civil liberty.
The president has appointed outgoing Prime Minister Muhammad Naji Otari as caretaker prime minister until a new government is appointed, the official Syrian news agency has said.
The government has little power in Syria, where power is concentrated in the hand of the president, his family and the security apparatus, observers say.
Mr Otari has been prime minister since September 2003.
A former parliamentary speaker and long-serving member of the ruling Baath party, he has also served as mayor of his hometown and Syria’s second city, Aleppo, and as governor of the province of Homs.
Mr Assad is trying to quell pro-democracy protests against his regime that human rights groups say have left more than 60 people dead.
Tens of thousands of people have been staging a demonstration in central Damascus, as well as in other major cities, in support of the president as he attempts to reassert his authority.
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