All 26 ministers submitted letters of resignation – but not Prime Minister Mahinda Rajapaksa or his brother, President Gotabaya Rajapaksa.
Many angry protesters demanding the resignation of the Rajapaksa family say the move is meaningless.
On Sunday, many defied a curfew to take to the streets in several cities.
The country is grappling with what is said to be its worst economic crisis since independence from the UK in 1948.
It is caused in part by a lack of foreign currency, which is used to pay for fuel imports. With power cuts lasting half a day or more, and shortages of food, medicines and fuel, public anger has reached a new high.
Education Minister Dinesh Gunawardena told reporters on Sunday that the cabinet’s ministers had tendered their resignation letters to the prime minister.
The prime minister’s own son, Namal Rajapaksa, was among those who resigned, tweeting that he hoped it would help the president and PM’s “decision to establish stability for the people and the government”.
However, many protesters who allege that the president and his family are to blame for the situation in the country are angry at the fact that he will remain in power.
Another called it a “play from the dictator’s playbook”.
“We want all of you gone – the Rajapaksas, the cabinet,their political henchman, the corrupt cronies, their media guys. All of them,” another social media user added.
On Sunday, thousands of people across the country defied a curfew order and a special notification banning anyone from from being on any public road, in a park, on trains or on the seashore unless they have written permission from the authorities.
The curfew, along with a ban on social media sites including Facebook, WhatsApp and Twitter, was meant to halt a planned day of protests, after a demonstration outside the president’s house on Thursday night turned violent.
The demonstrations mark a massive turnaround in popularity for Mr Rajapaksa who swept into power with a majority win in 2019, promising stability and a “strong hand” to rule the country
I met opposition leader Sajith Premadasa at another impromptu protest on Sunday, where he along with other members of his party were stopped at police barricades as they tried to enter the city’s Independence square.
“The supreme law of the land protects the right of the people to share their opinions, to demonstrate and to engage in peaceful democratic activities, so that right cannot be violated,” he said, adding that the curfew and social media ban were dictatorial, autocratic and draconian steps.
I also met several people who had defied the curfew to come out and protest.
Suchitra was one of dozens gathered at a protest outside an Asian restaurant by what’s usually a busy road.
As he cradled his 15 month-old baby boy, who shares his name, Suchitra told me about the daily problems he faced with power cuts.
“Without electricity our fans don’t even work. In this heat it’s impossible for the baby, or us, to sleep.”
“I came out today because my rights have been taken away, and I’m very angry,” said Anjalee Wandurgala, one of a few hundred students who gathered in a part of Colombo.
“Why have they put this curfew? Is it to protect us?” she asked. “It doesn’t make sense at all”.
Freelance advertising copywriter Sathsara says it is the first time he has ever protested.
“I’m freelance, but I can’t earn money as there’s no gas, no electricity. I’m totally broke,” he says.
He’s one of many young Sri Lankans struggling to see a way forward through this crisis.
“We are at the prime of our lives, how are we going to achieve our dreams with all this happening?”