The Czech centre-right government agreed to resign, Prime Minister Petr Fiala said on Thursday, a formal step to handing over power to a new cabinet being formed by populist billionaire Andrej Babis after his October election victory.

The outgoing cabinet remains in office until Babis' team are formally appointed, which is not expected for several more weeks.

Fiala was scheduled to hand in the government's resignation to President Petr Pavel later on Thursday.