In a televised speech, Bashir said he would dissolve the central government as well as state governments.
“Firm economic measures should be taken in a new government”, Bashir said, adding that he will assign that task to a qualified team.
Mr Bashir did not stop there and called on parliament to postpone constitutional amendments that would allow him to seek another term in a 2020 presidential election.
In a subsequent decree, Bashir set up a caretaker administration comprising a senior official from each ministry but kept the defence, foreign, and justice ministers in place.
In his speech, Mr Bashir also addressed the opposition and extended an olive branch.
“I extend a sincere invitation to the opposition forces, who are still outside the path of national reconciliation … to move forward and engage in the dialogue regarding the current issues of our country.”
His speech, however, seemed to have fallen on deaf ears and afterwards, angry protesters in the city of Omdurman chanted “Freedom!” and set fire to tyres while others blocked a main road, a Reuters witness said. Police then fired tear gas and chased protesters through small streets.
The Sudanese Professionals Association (SPA), the main protest organiser, has issued a call for additional demonstrations.
“The demands of this revolution are clear … foremost that this regime and its head step aside, including its repressive institutions,” the SPA said in a statement.
Last December, mass protests against President Bashir’s three-decade rule erupted in Khartoum over the country’s spiralling economic woes that have over the past year seen inflation rates spike to the third highest in the world.
The shortages of basic commodities such as bread — the most consumed food item — are reported to be critical, while petrol stations have also run out of fuel.