Prime Minister Sheikh Hasina has stepped down from her position after 15 years in power, the army has said.
The move comes after weeks of massive protests that began as rallies against job quotas in the civil service but have since mutated into demonstrations calling for Hasina's resignation.
Hasina has ruled Bangladesh since 2009 and won her fourth consecutive election in January after a vote without genuine opposition.
Her government has been accused by rights groups of suppressing dissent by violent means and of abusing state institutions to bolster its hold on power.
Protesters storm Hasina's Dhaka residence
Protesters stormed Bangladeshi Prime Minister Sheikh Hasina's palace on Monday after reports emerged that she had fled to safety.
Bangladesh's Channel 24 broadcast images of crowds running into the compound, waving to the camera as they celebrated.
Student protesters had been calling for a march on the capital, Dhaka, following deadly protests on Sunday that claimed dozens of lives, including those of 14 police officers.
Security forces had barricaded routes to Hasina's office with barbed wire on Monday morning, but huge crowds flooded the streets, tearing down barriers.
Hasina flees to India, media reports say
Bangladesh's former Prime Minister Sheikh Hasina has flown by helicopter to India's northeastern city of Agartala as she flees from massive anti-government protests, according to multiple intelligence sources speaking to media.
Agartala, the capital of the Indian state of Tripura, is just 2 kilometers (1.2 miles) east of the border to Bangladesh
India is set to offer a safe passage to Hasina, the reports said, citing intelligence sources.
Interim government to be formed, army says
In an address to the nation, Bangladesh's army chief Waker-Uz-Zaman has said he will form an interim government, confirming that Prime Minister Sheikh Hasina had resigned.
He added that he would seek the president's guidance on forming a new government.
"I am taking full responsibility," the general said, although it was not clear if he would head a caretaker government.
Zaman also promised justice for all those killed during weeks of anti-government protests, adding that the military would stand down.
"Keep faith in the military, we will investigate all the killings and punish the responsible," he said. "I have ordered that no army and police will indulge in any kind of firing."
In his address, he also called on students to remain calm and go home, saying he was trying to "find a solution for the country."
His remarks come after Hasina was reported to have fled the country amid the massive demonstrations, during which dozens, including police, are reported to have been killed in clashes between protesters and security forces.
