Student protesters had threatened more demonstrations if parliament was not dissolved.
Bangladesh’s president dissolved parliament on Tuesday, paving the way for the formation of an interim government, a day after Prime Minister Sheikh Hasina resigned and fled the country following a violent crackdown on a student-led uprising.
A statement from President Mohammed Shahabuddin’s office also said that Hasina’s arch-rival, Bangladesh Nationalist Party (BNP) chairperson Begum Khaleda Zia, a former prime minister, had been freed from house arrest.
Student protesters had threatened more demonstrations if parliament was not dissolved.
According to the presidential statement, the decision was made following meetings with the heads of defence forces, leaders of political parties, student leaders, and civil society representatives.
Hasina’s flight on Monday ended her 15-year second stint in power.
She had ruled the country for 20 of the last 30 years, having inherited the political movement of her father, state founder Mujubur Rahman, who was assassinated in 1975.
Bangladesh’s army chief general, Waker-Uz-Zaman, was due to meet student leaders to discuss the formation of an interim government that is expected to hold elections soon after it takes over.
Mr Zaman announced Ms Hasina’s resignation on Monday.
Ms Hasina flew to India and is staying at a safe house outside New Delhi.