Ex-army chief Sisi was sworn in yesterday after winning a lopsided victory in a vote boycotted by the Muslim Brotherhood movement of Mohamed Morsi, the elected president he deposed last July.
"The president accepted the government's resignation and tasked Mr Mahlab with the formation of a new government to implement the state's vision for the upcoming phase," presidential spokesman Ehab Badawy said in a statement.
Mahlab said he had not yet begun talks on forming a new government, state news agency MENA reported.
"I assure you that along with the ministers... I exerted all efforts to accomplish the duties we were tasked with in very difficult circumstances," Mahlab said.
Since Sisi deposed Morsi after millions of people protested against the Islamist's divisive year-long rule, Egypt has been deeply polarised.
The economy has also nosedived on falling tourist revenues and investments.
At the same time, the government has carried out a brutal crackdown on Morsi's Muslim Brotherhood in which more than 1,400 people have been killed and thousands jailed.
"I am looking to a new era built on reconciliation and tolerance... Except with those who committed crimes or used violence as a tool," he said in his first national address as president.
"I am saying clearly that those who shed the blood of the innocent and (who) killed... The sons of Egypt, they don't have a place in (our) march."
Just hours after his speech, a Cairo court today gave one-year jail terms to 112 Morsi supporters for holding unauthorised protests, rioting, blocking roads and assaulting policemen on January 25, the third anniversary of the 2011 revolt against long-time strongman Hosni Mubarak.
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