President Mohamed Nasheed said in a nationally televised address that he was stepping down because he didn't feel he was able to maintain security and peace in the country, which attracts hundreds of thousands of tourists every year.
"This morning, about 500 opposition supporters along with some Islamic hardliners protested outside the army headquarters, shouting slogans and some police officers mutinied and joined them," Nasheed's spokeman said. "And so, the president was in a situation where he could either tell the army to forcibly crack down on the protesters or he could step down. He chose the latter."
The police officers appeared to have sided with the Progressive Party, which is loyal to former president Maumoon Abdul Gayoom, who ruled Maldives for 30 years before Nasheed defeated him.
"This is a situation where the first democratically elected president in the Maldives is taken down by a former dictator and his supporters," the spokesman said.
Nasheed had faced strong criticism in recent months from opposition groups calling for Islam to play a greater role in the running of the country.
Vice President Mohammed Waheed Hassan has taken temporary charge following Nasheed's departure.
The different political parties in the country, an archipelago of almost 1,200 coral islands south-southwest of India, planned to meet Tuesday afternoon to discuss the next step, said Bunya Maumoon, a spokeswoman for the Progressive Party.
In 2008, Nasheed became the country's first democratically elected president in 30 years.
Since then, the secular nation of about 350,000 Muslims has been grappling with the role of Islam in government, spurred in part by the supporters of Gayoom.
The nation was rocked by violent protests last year that Nasheed accused Gayoom's supporters of orchestrating. But demonstrators said at the time they were protesting economic conditions, created by reforms imposed by Nasheed.
The government also clashed with opposition groups in December over the issues of massage parlors and the sale of pork and alcohol in resorts.
Tuesday's events unfolded after about 200 policemen gathered in Republic Square in the capital, Male, according to Ahmed Rasheed, an executive producer at the state TV station.
A peaceful standoff with members of the Maldives defense forces in the square turned violent early Tuesday morning, he said, describing the situation in Male as "chaos."
The policemen took over the state TV station later Tuesday morning. They changed its name from the Maldives National Broadcasting Corporation back to its old name, Television Maldives.
Gayoom is still considered a hero by many in Maldives who credit him for transforming a fishing culture into a tourist nation.
During his long rule, Nasheed was among his fiercest critic, alleging that Gayoom ruled with an iron fist, crushing dissent, amassing wealth and stacking his administration with friends and relatives.
Nasheed was arrested as a journalist several times and held as a political prisoner.
Until his defeat at Nasheed's hand, Gayoom won six previous elections as the only candidate on the ballot.
He had sought a seventh five-year term, saying that he would need a few more years to see through the reforms he has put in place.
Maldives is also grappling with a very likely possibility that it will go under water if the current pace of climate change keeps raising sea levels.
Most of it lies just 4.9 feet (1.5 meters) above sea
The United Nations' Intergovernmental Panel of Climate Change has forecast a rise in sea levels of at least 7.1 inches (18 cm) by the end of the century.
Male is already protected by sea walls. But creating a similar barrier around the rest of the country will be cost-prohibitive.
Soon after his election, Nasheed raised the possibility of finding a new homeland for the country's residents.
He is the subject of an upcoming documentary, "The Island President," that tells the story of his efforts to raise awareness of climate change by highlighting the effects it is having on Maldives.
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