Mr Tokayev appointed the current first Deputy Prime Minister, Alikhan Smailov, as interim Prime Minister. The resignation comes after Kazakhstan declared a two-week state of emergency in Almaty and in the western Mangistau province as protests became violent.
The ongoing protests were prompted by a sharp rise in the price of the fuel at the start of the year.
The state of emergency enforces residents of the Central Asian nation’s largest city and in the western Mangistau province to abide by an 11pm to 7am curfew.
It also restricts movements and bans mass gatherings, according to documents published on the President’s website.
Mr Tokayev said: “Calls to attack government and military offices are absolutely illegal.
After prices spiked, demonstrations involving thousands of people erupted on January 2 in the town of Zhanaozen.
Roughly a thousand protesters gathered in Almaty on Tuesday night.
Riot police were injured in clashes, according to AFP.
There have also been reports of internet outages across the nation.
Mr Tokayev tweeted late on Tuesday stating authorities would restore lower prices for the fuel “in order to ensure stability in the country”.