Premier Mohammed Hassan Sharq resigned Monday, broadening the power of President Najibullah.
Sharq, 63, had remained in Najibullah's 28-member Cabinet after a weekend shake-up in which the president replaced seven of 10 non-Communist Party ministers with members of his Marxist People's Democratic Party.
Sharq is not a member of the ruling party but had been selected as premier by Najibullah last May to help portray his government as enjoying broader support.
A source who spoke on condition of anonymity said Sharq met with Najibullah and agreed that the president should head the Cabinet during the state of emergency that was declared Saturday.
Also over the weekend, Najibullah created a new military council that appeared to take over as the most powerful body in his government.
The 20-member Supreme Military Council for the Defense of the Homeland met Monday to discuss the government's battle against the guerrillas. It consists of the most powerful Cabinet members, the Communist Party Politburo and Central Committee and military leaders.
Foreign Minister Abdul Wakil said Sunday that the council will coordinate economic and military activities. He said it would not replace the Cabinet, but he did not elaborate.
In Pakistan, meanwhile, Muslim rebel leaders attempting to organize an interim Afghan government in exile again made little progress Monday.
The last Soviet troops pulled out of Afghanistan last week, ending the Red Army's nine-year intervention and leaving Najibullah's forces alone in the fight against the U.S.-supported guerrillas.
The guerrillas and some Western diplomats believe the government in Kabul will soon fall without the help of Soviet troops.
Sharq's resignation after nine months in office had been widely expected, but the reasons were not immediately clear.
One government source said he had cited poor health. Another said he and Najibullah had mutually agreed on the move. The premier's office would only say that Sharq was at home.
Sharq's appointment last year was portrayed as a sign that the People's Democratic Party, which seized power in 1978, was prepared to share power, and he was given a high profile. But Western-backed rebels dismissed him and refused to contemplate joining any coalition with the ruling party.
The state of emergency, declared over the weekend, suspends or limits freedom of expression, privacy and public assembly.