Pakistani Prime Minister Zafarullah Khan has tendered his resignation suddenly, party sources said.
"He has resigned," a senior leader of the pro-military Pakistan Muslim League said on condition of anonymity. He declined to give details.
Former finance minister Mr Shaukat Aziz will take over as prime minister once Mr Chaudhry Shujaat Hussain completes an interim term in office, a member of the outgoing government said.
Mr Aziz, a respected former banker credited with turning around Pakistan's economy over the last five years, was finance minister until the cabinet was dissolved by outgoing Mr Jamali.
The resignation came after Mr Jamali met President Pervez Musharraf.
Analysts believe Gen Musharraf has been seeking to replace Mr Jamali with a more dynamic figure better able to counter parliamentary opposition and pursue his reform programmes more aggressively.
Mr Jamali's resignation ended a 19-month tenure in which his government failed to emerge from the shadows of Gen Musharraf, a dominant military leader.
The resignation will raise fresh concerns over the state of democracy in Pakistan, nearly two years after elections formally ended military dictatorship. The West has been slow to criticise the general, a key player in the US-led "war on terror".
The opposition complains that the general has stifled democracy, despite holding elections in October 2002 which formally ended his three-year military dictatorship. He took power in a bloodless coup in 1999, ousting then prime minister Nawaz Sharif, who is now in exile.