Syria's government resigned today, the official SANA news agency said.
Analysts regard this long-awaited move as a sign President Mr Bashar al-Assad will try to push reform of the country's economy.
SANA said Mr Assad accepted the resignation of Prime Minister Mustafa Mero's government and asked him to form a new cabinet, but gave no details about its shape.
The present government will stay on as a caretaker until the new one is formed, it said.
Analysts and diplomats believe changes will come in the economic portfolio. Mr Assad pledged liberalisation last year when he succeeded his late father, Hafez al-Assad, who ran the country for 30 years through the socialist Ba'ath party.
He has pushed through reform laws such as one allowing private banks, but analysts believe he is hamstrung by an old guard of his father's associates. It is wary of reform and has vested interests in preserving present commercial and tax laws.
Mr Assad recently signed into law a 2002 budget projecting expenditure of $7.6 billion and has pledged to focus on creating jobs in the country, which has negligible economic growth but a population expanding at an estimated three per cent annually.