Prime minister Juha Sipila said on Friday morning that he would resign later in the day ahead of elections set for April 14 in which the opposition Social Democrats are set for big gains according to opinion polls.
Sipila will officially offer his government's resignation to the president today at 0800 GMT, the president's office said in a statement.
Officials said the resignation was mainly due to the virtual failure of the coalition government's plan to reform the public healthcare system, which has been crucial to the ruling coalition's plan to balance public finances.
"The president has accepted the government's resignation and asked it to continue on a caretaker basis until a new government has been appointed".
Observers said it will not make much difference as its term in office is almost over and the parliamentary election is due in April. They resulted in the formation of a three-party government coalition between the "Finnish Centre", the National Coalition Party and the "True Finns".
There has been a hard fought struggle for the wide-reaching reform for over a decade, dividing successive governments.More news: Offshore wind turbines to power past fossil fuels by 2030
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Speaking at a press conference, Sipila said health care had been one of his government's main goals and that he was "hugely disappointed". "I take responsibility for the failure".
The planned health care reform was meant to tackle an aging population and reduce public spending by 3 billion euros ($3.4 billions) by 2029.
But the health reform plan has had a rocky road, running several times into constitutional obstacles, and the government has also come under fire over a scandal involving neglect at nursing homes.
Sipila's decision is also an admission that the government was unable to rally enough support to push its pro-market reforms through parliament.
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