Kathmandu: Nepal's Prime Minister agreed to resign after the former communist rebels supported his proposal to extend the term of parliament so it can draft a new constitution to end years of civil war and strife.
Prime Minister Madhav Kumar Nepal told reporters early on Saturday he would resign soon, but did not elaborate.
"We have gained more time which we need to utilise to take the peace process towards a positive end," he said.
Law Minister Prem Bahadur Singh said the three main political parties had agreed that the prime minister would resign within days, and a new national government would take power.
Maoists, the ex-rebels, have been protesting both in parliament and on the street for months demanding the prime minister's resignation.
The Maoists control most seats in the assembly, and their support was required to get the two-thirds majority to pass the government proposal.
The lawmakers approved the proposal just after midnight Friday.
It was not yet decided who would succeed the prime minister, but the main political parties have also agreed to hold talks to form a national government that would include most parties in the assembly.
The two-year term of the Constituent Assembly was set to end on Saturday.
The assembly intends to draft a new constitution to help guide Nepal out of years of civil war and upheaval, but has achieved little due to political bickering.
The Maoists ended their decade-old rebellion in 2006 and joined a peace process.
Since then they have confined their fighters to United Nations-monitored camps and joined mainstream politics.
They won 2008 elections and formed a government, but it later fell in a dispute with the nation's president over the Maoists' attempt to replace the army chief.
The United Nations, which played a key role in the peace process, has expressed concern over the political situation in Nepal.