The decision of the Cabinet, presided over by Prime Minister Manmohan Singh, will come into effect after promulgation of a notification by President Pranab Mukherjee.
It has to be then endorsed by Parliament through a resolution under Article 356 of the Constitution.
Lashing out at Jung, Arvind Kejriwal, who resigned as Delhi Chief Minister yesterday, said that the LG was "openly flouting" the decisions taken by a majority government.
In his report to the Centre, Jung did not favour dissolution of the 70-member Delhi Assembly as recommended by the council of ministers headed by Kejriwal when it met last night and decided to quit after being defeated in the Assembly over introduction of the Jan Lokpal Bill.
The LG's move keeps the option open for any political party or a combination of parties to try and form a government in future.
The Assembly elections late last year had given a split verdict with no political party getting absolute majority. AAP, which won 28 seats, had formed the government in December with the outside support of 8 MLAs of Congress. BJP has 31 MLAs in the Assembly while NDA ally SAD has one.
The LG has also sent, along with his report, Kejriwal's resignation letter.
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