The decree will take effect on Monday, the President's Office said.
Until appointment of a new head of the Interior Ministry, Health Minister Raimondas Šukys has been appointed to work in the post on a temporary basis.
Under a coalition agreement signed in the end of the tenure in 2008, the position of interior minister belongs to Liberal and Center Union. However, Jurgis Razma, elder of the ruling Homeland Union – Lithuanian Christian Democrats group, told Lithuania's national radio on Friday morning that the new minister does not necessarily have to be appointed by Liberal Centrists.
In his words, after Palaitis disregarded the prime minister's request to wait with designation of a new director of the Financial Crimes Investigation Service, the coalition could raise the issue on the party to propose a candidate for the minister.
On Thursday, Palaitis appointed Kęstutis Jucevičius to FCIS leadership. Jucevičius had won a competition for the position.
Palaitis turned in his resignation to Prime Minister Andrius Kubilius on Wednesday, saying he was stepping down for the sake of smooth operations of the government and the ruling coalition.
The minister announced his resignation plans after meeting with Grybauskaitė on Monday. Among participants of the meeting were Kubilius and Algis Čaplikas, leader of Liberal and Center Union that delegated Palaitis to the Cabinet.
Prior to that, partners in the ruling coalition – conservatives and the Liberal Movement – said they were ready to form a minority government without Liberal and Center Union that had delegated Palaitis to the Cabinet, should the minister decide to stay in the post. Politicians had even proposed an idea of calling early general elections.
Tensions in the ruling coalition heightened after Palaitis sacked director of the Financial Crimes Investigation Service, Vitalijus Gailius, and his deputy Vytautas Giržadas against the prime minister's will on 15 February.