Brazil's Senate voted overwhelmingly in favour of suspending President Dilma Rousseff from office for 180 days and subjecting her to an impeachment trial on charges of budget irregularities.
The 55-22 vote on Thursday came after a marathon 20-hour debate at the National Congress in the capital, Brasilia.
It was a crushing defeat for Rousseff, who has characterized the impeachment proceedings as a parliamentary coup, and deepens the political crisis in Latin America's biggest economy.
During the next six months, the Senate will investigate the allegations against her and then conduct another vote, in which a two-thirds majority would be required to permanently remove her from office.
Rousseff is accused of tampering with figures to disguise the size of Brazil's budget deficit during her 2014 re-election campaign. She has denied any wrongdoing.
Her suspension ends 13 years of rule by the leftist Workers' Party, which has become increasingly unpopular for its handling of the battered economy and its connection to a massive corruption scandal involving the state-run oil company, Petrobras.
Vice President Michel Temer, of the centrist Brazilian Democratic Movement (PMDB), immediately took over as interim president.
Temer has been Rousseff's deputy since she took office in 2011, becoming the first woman to hold the position of president.
But their relationship has deteriorated, with Rousseff now referring to him as a "traitor," and the PMDB withdrawing from the coalition government last month.
Brazil was one of the world's fastest-growing economies until a few years ago, but is now in the midst of one its worst recessions in decades. Some 11 million Brazilians cannot find a job.
Temer, who is perceived as more market-friendly, has called for investor calm. He says he will push for more privatizations, reduce the number of public employees and get the budget deficit under control.
He said he wants to slim down the number of cabinet positions, which are seen as a breeding ground for corruption, and make appointments from all political parties except Rousseff's Workers' Party.
Ahead of the Senate vote, local media reported that Rousseff had cleared her personal effects from her office. She was seen walking the gardens of the Palacio da Alvorada, the official residence of the president.
Bitter political rival Eduardo Cunha, who was the president of Brazil's lower house, launched the process to impeach Rousseff in December. The chamber voted in favour of her impeachment in April, sending the issue to the Senate upper chamber.
Cunha was suspended last week on allegations he was obstructing a corruption investigation against himself.
In a last-ditch effort to save her presidency, Rousseff appealed to the Supreme Court this week to block the Senate vote, arguing that Cunha had abused his position of power to seek "revenge."
The court rejected her appeal.
Mass street protests broke out in the country last year, reflecting the anger at the government's inability to improve economic conditions and the corruption scandals that have left around 60 per cent of the 594 members in the National Congress under investigation.
The biggest of all the scandals involves state-run Petrobras. Bribes totaling billions of dollars are alleged to have been paid in the awarding of dozens of contracts by the oil giant to construction companies. Some of the money was then shared with politicians from several political parties.
Rousseff was chairwoman of the Petrobras board between 2003 and 2010, when the kickback schemes were said to have taken place.
She denies having had any knowledge of wrongdoing and has not been charged in the case. She has been mired in the scandal, however, which has helped to drive her popularity rating down to around its current 14 per cent.
A long-time left-wing activist who trained as a guerrilla in her youth in order to fight the military dictatorship, Rousseff was elected president in 2010 and was narrowly re-elected to another four-year term in 2014.
In her first years as president, Rousseff was immune to several corruption-driven resignations from her cabinet, with nearly two-thirds of Brazilians at the time saying that she was a "good" leader.
In August, hundreds of thousands of athletes, spectators and media will descend on Brazil for the Olympics, a high-profile showcase for the country.
Rousseff ignited the Olympic flame in Brazil's capital last week, kicking off a cross-country torch relay to build enthusiasm for the games.
Intended to be a highlight of her presidency, Rousseff will now watch the Olympics from the sidelines. Temer will open the games on August 5.
The last time Brazil's Senate pressed impeachment proceedings against a president was in 1992. Fernando Affonso Collor de Mello resigned before the trial got under way. He now serves as a senator.