Prime Minister Chung Hong-won on Sunday resigned over the confused official response to the ferry disaster off the southwest coast on April 16 and the following days.
The resignation signals the worst crisis for President Park Geun-hye's administration so far and is expected to lead to a wider government reshuffle.
Chung took office just over a year ago and resigned 11 days after the Sewol sank with most of it passengers. He will stay in office until the salvage operation is complete and a candidate to succeed him has been named.
Cheong Wa Dae is preparing a radical revamp of its crisis-response system and a widespread reorganization of key government posts.
Park has vowed to thoroughly examine the cause of the ferry accident as well as the inept handling of the response.