In a message carried by the official APS news agency on Monday, the 82-year-old also said the elections would follow a national conference on political and constitutional reform to be carried out by the end of 2019.
“There will be no presidential election on April 18,” he said in reference to the scheduled date of the vote, adding that he was responding to a “pressing demand that you have been numerous to make”.
The ailing leader, who has been confined to a wheelchair since suffering a stroke in 2013, said a government reshuffle would also take place soon.
“Even if this is a beautiful victory for the Algerian people and the gesture was there, I do not believe that the entire regime and its system is going to collapse,” said Dalia Ghanem Yazbeck, a resident scholar at the Carnegie Middle East Center told Al Jazeera.
“This is a regime that is composed of different strata and circles of power. You have the FLN apparatchik, you have the bureaucracy, political and military leadership and you have business tycoons,” she added.
‘All eyes on the army’
According to APS, Prime Minister Ahmed Ouyahia resigned on Monday and was replaced by Interior Minister Noureddine Bedoui. Ramtane Lamamra was named deputy prime minister, a position that did not exist before.
The dramatic developments followed weeks of mass demonstrations against Bouteflika’s plan to extend his 20-year rule.
Amel Boubekeur, a research fellow at the Paris-based School for Advanced Studies in the Social Sciences, said Monday’s announcement was only the beginning.
“All eyes are on the army now. Is the army going to let new protests to happen next Friday?” Boubekeur told Al Jazeera.
“With Bouteflika aside, the army is going to have its say as to what kind of position they will accept.
“Now it seems the regime of Bouteflika is done, but [the question is] are we going to get back the state civilly without … any pressure on all these people who have been using the state for their interest for so long?”
‘Bouteflika’s system is over’
A veteran of the country’s war of independence against colonial France, Bouteflika has seen his popularity wane in recent years as a result of his deteriorating health.
Massive protests began on February 22 to denounce Bouteflika’s plans to extend his rule in the April 18 polls.
Bouteflika tried to appease protesters by offering to hold a national dialogue conference, changing the constitution and holding an anticipated vote within a year of his reelection in which he promised not to take part.
The promises, however, failed to quell public anger, galvanising discontent among different sectors, particularly students and other young people.
Some long-time allies of Bouteflika, including members of the ruling FLN party, have expressed support for the protesters, revealing cracks within a ruling elite long seen as invincible.
In the clearest indication yet that the generals sympathise with protesters, the chief of staff said the military and the people had a united vision of the future, state TV reported. Lieutenant General Gaid Salah did not mention the unrest.
“Bouteflika’s system is over,” said a commentator on Ennahar, which is close to the president’s inner circle.