The interim rival government in eastern Libya has resigned amid protests over power cuts and deteriorating living conditions.
Demonstrators in the city of Benghazi set fire to Gen Khalifa Haftar's headquarters over the weekend.
Ezzel-Deen al-Falih, a spokesman for the Tobruk-based House of Representatives (HoR), said Prime Minister Abdallah al-Thani tendered the government's resignation to Speaker Aguila Saleh late on Sunday.
Libya has been torn by violence since long-time ruler Colonel Muammar Gaddafi was overthrown and killed in 2011 by Nato-backed forces.
A 14-month offensive by Haftar's forces to gain control of the capital, Tripoli, from the internationally recognised Government of National Accord (GNA) fell apart in June, with the front lines now solidified near the central city of Sirte.
In early May, a leaked UN report said that hundreds of mercenaries from the Wagner Group - run by Yevgeny Prigozhin, a close associate of President Putin - were operating in Libya.
Gen Haftar is also backed by the United Arab Emirates and Egypt, while the GNA enjoys the support of Turkey, Qatar and Italy.
Parliamentary spokesman Abdallah Abaihig said HoR legislators would review the resignation of al-Thani's government, which is not internationally recognised, in their next meeting. No date has been set for the session.
In recent days, hundreds of people have taken to the streets of Benghazi and other eastern cities to protest against electricity shortages and poor living conditions, setting tyres on fire and blocking traffic on several major roads.
Libya has the biggest reserves of oil and gas in Africa.
Since January an armed group loyal to Gen Haftar has blocked key oil fields, causing power cuts and costing Libya billions of dollars in lost exports.
The UN mission said the protests highlight "the urgent need to lift the oil blockade" and the return to a "full and inclusive" political process to end Libya's years-long conflict.
The US Embassy in Libya said Haftar agreed to reopen oil fields and terminals no later than Saturday. By Sunday evening, it was not clear whether the blockade had been lifted.
If no resolution is reached, the prospect of yet another war would be costly for everyone, and leave neither side closer to consolidating a grip on the whole country.