The leader of the Christian Democratic Union Annegret Kramp-Karrenbauer and the Chancellor of Germany Angela Merkel met with party members before a behind-closed-doors meeting on Sunday.
After the executive board meeting, both Kramp-Karrenbauer and Merkel accepted the resignation of their coalition partner, the leader of the Social Democrats Andrea Nahles.
Pressure had been mounting on Andrea Nahles, after voters handed the party its worst ever European election results a week ago.
A Greenpeace protest outside the CDU's HQ was held outside while the meeting was being held.
Activists brought a siren in a cage in an attempt to disturb the meeting, which convened for the first time after EU elections.