Romania's Prime Minister Emil Boc has stepped down to "defuse political and social tension" after a series of protests against austerity measures.
Speaking after a cabinet meeting, he said he had given up the government's mandate as "it is the moment for important political decisions".
Although Romania's economy grew last year, the government has been hit by three weeks of demonstrations.
Mr Boc has imposed a 25% cut in public sector wages and a freeze on pensions.
Sales tax was also increased to 24%, in a country seen as Europe's second poorest.
Romania said it needed to implement the measures to qualify for the next instalment of a 20bn-euro ($25bn; £17bn) bailout loan from the International Monetary Fund (IMF).'Technocrat government'
In a statement, Mr Boc, 45, said that in a time of crisis, his centrist government had not taken part in a popularity contest but had acted to save the country.
"I know that I made difficult decisions, but the fruits have begun to appear," he said.
Elections in Romania are scheduled to take place in November and there is speculation that President Traian Basescu may seek to appoint a technocrat-led government until the vote.
Protests broke out last month, initially against the resignation of popular junior health minister Raed Arafat, but soon became an expression of discontent against austerity and corruption.
The left-wing opposition USL alliance, headed by Victor Ponta, is currently leading the opinion polls. Mr Ponta suggested last week that Romania should either have early elections similar to Spain, or temporarily install a technocrat administration, like Italy.