Atambayev's Social-Democratic Party of Kyrgyzstan said the premier was forced to resign, and accused the president of trying to manipulate parliamentary elections set for December 16.
A caretaker Cabinet to be led by new acting premier Iskenderbek Aidaraliyev will remain in office until a permanent government is formed after the elections.
Atambayev, a former co-chairman of the opposition For Reform movement, was appointed head of government in March, shortly before mass opposition rallies.
In a bid to defuse political tensions and bring the situation back to normal, President Bakiyev entrusted Atambayev with forming a new coalition government, including representatives of the radical opposition.
In October the president dismissed the government after the adoption of a new Constitution strengthening the president's power, but told it to continue working until the formation of a new Cabinet.
In line with the new Constitution, the Kyrgyz 90-seat parliament will be elected from party lists for the first time in the country's history. A threshold of 5% has been set for parties to gain seats in the legislature.