Ar-Namys and Ata-Meken, two parties in the ruling parliamentary coalition, left the bloc this week, leaving the ruling coalition short of the majority needed to lead the 120-member Parliament.
Kyrgyz President Almazbek Atambayev signed a decree Friday dismantling the government, reports Russian news agency RIA Novosti.
Kyrgyz law stipulates the prime minister must resign and a new government must be formed if the ruling majority collapses.
A spokesman for the prime minister's office this week said early calls by members of the coalition for a new government were out of step with national laws in the former Soviet republic.
A 2010 coup toppled the government of President Kurmanbek Bakiyev. Atambayev, a former prime minister, secured the presidency by winning 63 percent of the vote in a subsequent election.
Hundreds of ethnic Uzbeks and Kyrgyzs were killed in ethnic violence after the coup. Human rights group say Bishkek has substantial work ahead to repair national divisions.