The nation's PM Lecornu has stepped down, less than a day after his ministers was announced.
The Elysée palace issued a statement after the Prime Minister met President Emmanuel Macron for an 60-minute discussion on Monday morning.
This surprising decision comes only less than a month after he was appointed prime minister following the dissolution of the prior administration of François Bayrou.
Various groups in the National Assembly had fiercely criticised the makeup of Lecornu's cabinet, which was very close to the previous one, and promised to block its approval.
Multiple political groups are now demanding a snap election, with certain voices urging the President to resign too - despite the fact that he has always said he will not leave before his term ends in five years from now.
"The President needs to choose: parliament's dissolution or leaving office," said Sébastien Chenu, one of prominent members of the National Rally.
The outgoing PM - the ex-defense chief and a ally of the President - was the fifth French PM in less than 24 months.
The nation's governance has been highly unstable since last summer, when snap parliamentary elections resulted in a deadlocked assembly.
This has posed obstacles for every premier to secure enough backing to enact new laws.
The previous administration was rejected in September after lawmakers refused to back his austerity budget, which aimed to slash government spending by €44bn.
France's deficit hit 5.8 percent of economic output in the current year and its national debt is 114 percent of GDP.
That is the third highest public debt in the euro area after two southern European nations, and equivalent to almost 50k euros for each resident.
Share prices dropped in the French stock market after the news of Lecornu's resignation broke on Monday morning.
