The Constitutional Court ruled that Ms Yingluck acted illegally when she transferred her national security head.
The ruling follows months of political deadlock. Anti-government protesters have been trying to oust Ms Yingluck since November 2013.
The remaining cabinet members have nominated the commerce minister to replace Ms Yingluck.
"The cabinet has agreed to appoint Niwattumrong Boonsongpaisan to act as caretaker prime minister," Deputy Prime Minister Phongthep Thepkanjana said. Full story...