Phumzile Mlambo-Ngcuka is a staunch supporter of Thabo Mbeki
Eleven members of the South African cabinet say they are resigning along with President Thabo Mbeki, who is to step down on Thursday.
The resignations are a blow to the African National Congress government, says the BBC's Peter Biles.
ANC leader Jacob Zuma said the situation would soon return to normal.
One of the eleven, respected Finance Minister Trevor Manuel, says he has been asked to stay on by the ANC leaders and he is happy to do so.
ANC secretary general Gwede Mantashe said only six of the 11 had "no intention of serving in the new government".
He said the remaining five, plus three deputy ministers, felt that a new president should be given the space to make appointments. However, they were ready to serve in a new government, if asked to do so, he added.
The ANC is divided between supporters of Mr Mbeki and Mr Zuma.
Mr Mbeki is to leave office on Thursday after accusations that he interfered in the prosecution of Mr Zuma on corruption charges.
A statement from the presidency said the resignation of 10 ministers, three deputy ministers and Deputy President Phumzile Mlambo-Ngcuka would also be effective on Thursday.
As party leader, Mr Zuma is favourite to become South Africa's president in elections due next year.
Mr Zuma's allies had said they wanted the cabinet to stay in place.
On Monday, Mr Zuma sought to reassure the business community and said there would be no change of economic policy.
A day later, he sought to play down the political turbulence, describing it as a "passing phase".
"Let me emphasise the current political changes taking place in the country are nothing extraordinary," said Mr Zuma.
"The situation will soon return to normal as we know exactly what we should do, and are doing it with speed, precision and sensitivity."
A close ally of Mr Zuma - ANC deputy leader Kgalema Motlanthe - is to replace Mr Mbeki as president until the elections, the ANC has confirmed.
At a hastily convened press conference in New York, Mr Manuel said both Mr Motlanthe and Mr Zuma had asked him stay.
"I am happy to serve a new head of state," he said.
Mr Manuel is seen as instrumental in South Africa's recent economic stability.
Many of Mr Zuma's supporters have criticised Mr Mbeki for being too business-friendly and want the government to do more to help those in poverty.
Among those to resign are Deputy Finance Minister Jabu Moleketi, who is in charge of finances for the 2010 World Cup, and Local Government Minister Sydney Mufamadi, who played a key role in negotiations over the political crisis in neighbouring Zimbabwe.
Mr Mbeki on Saturday accepted a decision by the ANC to recall him as president.
Correspondents say the ANC's hopes of managing a stable transition have now been thrown out of the window.
Meanwhile, Mr Mbeki has lodged a legal appeal at the Constitutional Court to clear his name after a judge said there was evidence that he might have interfered in the prosecution of Mr Zuma.
He said the ruling was "unfair and unjust" as he had not been able to defend himself in court.
The "vexatious, scandalous and prejudicial" judgement had already cost him his job and damaged his reputation, he said.