The move, while expected, was another step in el-Bashir's efforts to consolidate his position in a power struggle with Hassan Turabi, a hard-liner in the ruling party.
Sudan Television said a new government would be announced soon.
El-Bashir had declared a state of emergency and dissolved Parliament on Dec. 12, leaving Turabi without his job as Parliament speaker. El-Bashir had accused Turabi, long seen as the power behind the scenes, of trying to undermine the presidency.
The firing of the government came a day after the governing National Congress Party decided to set up a panel, headed by el-Bashir, with the mandate to nominate a new Cabinet.
The old Cabinet had assumed a caretaker position after the state of emergency was imposed. El-Bashir is now in a position to choose loyalists in the new government, further isolating Turabi.
There were no immediate reports of tension in the streets. There was no violence when el-Bashir imposed the state of emergency, indicating that Turabi's fall from grace was not widely mourned even though he was responsible for bringing el-Bashir to power.
Turabi, who led the now-defunct Islamic Front, had sponsored a 1989 military coup that installed el-Bashir, then an army brigadier, as president.
In recent months el-Bashir had been attempting to wrest control from Turabi, who was trying to limit the powers of the president by calling for the position of prime minister to be created.
Matters came to a head last year when Turabi's supporters in Parliament introduced constitutional amendments seeking to give the legislature the power to remove the president with a two-thirds majority vote.
The political infighting also led to a stalemate in the search for a political solution to the civil war in the south, where rebels are fighting for autonomy for the largely Christian and animist region from the Muslim and Arab north.
The rebels have often said that no solution can be reached as long as Turabi remains in power. About 2 million people have been killed in the 17-year-old civil war and resulting famines.
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