Czech Prime Minister Bohuslav Sobotka will formally tender his resignation Thursday following a high-stakes row with his finance minister.
The leftist Sobotka said Tuesday he was standing down after the dispute with billionaire minister Andrej Babis, a popular centrist rival tipped to win elections later this year.
"Prime Minister Bohuslav Sobotka will present his resignation to the president on May 4, 2017 at 1515 (1315 GMT)," President Milos Zeman's spokesman Jiri Ovcacek said in a tweet.
After meeting Zeman on Wednesday, Babis said the president would accept the resignation.
"I have understood it that way," said Babis, the most popular politician in the EU member state of 10.6 million people and most likely the winner of the next election scheduled for October 20-21.
"I also told the president I could see no reason why this government should step down," he added, calling Sobotka's move five months ahead of the election "nonsense."
Sobotka's resignation, which will bring down his entire cabinet, surprised both politicians and pundits who had expected the prime minister to sack Babis.
The head of the centrist ANO party and the second wealthiest Czech national, Babis has found himself under fire over his purchase of tax-free bonds issued by his mammoth Agrofert conglomerate.
Sobotka has cast doubt on the way Babis had raised money to buy the bonds and insisted that as a finance minister fighting tax evasion, Babis should not benefit from tax loopholes.
The Czech political scene has been gripped by debate for weeks over the fate of the three-party governing coalition comprising Sobotka's leftwing CSSD party, Babis's ANO and the small centrist Christian Democrats, and which took office in 2014.
Analysts in Prague were caught off guard by Sobotka's resignation but said an early election was unlikely to be called during the summer.
Experts suggest that President Zeman could allow the outgoing cabinet to govern in a caretaker capacity until the October election -- an option preferred by ANO and Christian Democrats leaders.
Interior Minister Milan Chovanec, who also met Zeman on Wednesday, said Zeman told him he would act fast after receiving the resignation.
"We also agreed we did not prefer an interim cabinet of technocrats," said Chovanec, the number-two man of Sobotka's party which insists the new cabinet must not comprise Babis.