Belgian's King Albert II on Monday formally accepted the resignation of Prime Minister Yves Leterme, dpa reported.
According to palace reports, Leterme was asked to stay on as a caretaker until a new government can be formed.
Leterme's resignation follows accusations that his government tried to prevent a court from blocking the sale of the country's troubled Fortis bank to BNP Paribas of France.
Belgian politicians spent the weekend desperately trying to cobble together a new government after Leterme made it clear he did not plan to continue on as president. Leterme only spent nine months in office and had already offered to step down.
Albert last week refused to accept a resignation offer from Leterme.
The political crisis leaves Belgium facing a period of deep uncertainty at the worst possible time, with the economy sliding into recession and investors' confidence at a low as a result of the global financial crisis.
The country has faced increasing problems in forming a government in recent years due to tensions between the French-speaking region of Wallonia and Dutch-speaking Flanders.
In recent years, the debate has been embittered by the growing economic imbalance between the regions, with Flanders one of Europe's wealthiest regions, and Wallonia one of its poorest.