Ukraine's acting Prime Minister, Yuri Yekhanurov, is set to hold talks to form a new government following the dismissal of the cabinet on Thursday.
Yuri Yekhanurov (right) is a long-standing Yushchenko ally
President Viktor Yushchenko said he sacked the government because it had become consumed by a power struggle.
The Ukrainian leader said he acted to preserve the ideals of the Orange Revolution, after his government had been accused of corruption.
Mr Yekhanurov said his priority would be to ensure stability.
Some of the old team are expected to be given jobs in the new administration, says the BBC's Helen Fawkes in Kiev.
"We are witnessing a paradox - many new faces have come to power, but the face of power has not changed," President Yushchenko said on television.
He was swept into power late last year in the Orange Revolution - a wave of street protests against the corruption that tainted the regime of then president Leonid Kuchma.
Rivals: Petro Poroshenko and Yulia Tymoshenko
The presidential elections had been widely condemned as rigged in favour of Mr Kuchma's ally, Viktor Yanukovych.
But in the last week three senior government officials have resigned.
One of them, a presidential aide, alleged that corruption was worse now than under the previous authorities.
Mr Yushchenko said in-fighting between members of the team had affected affairs of state.
Correspondents say Prime Minister Yulia Tymoshenko and the head of the Security and Defence Council, Petro Poroshenko, were at loggerheads from the start.
The Russian President Vladimir Putin voiced support for Mr Yushchenko, saying the crisis was no cause for alarm.