Hundreds of protesters poured into the lawns of the premier's office after police removed barricades, saying they would no longer use force against activists trying to enter the Government House and police headquarters.
The mood in the capital Bangkok appeared considerably calmer after the surprise move ahead of revered King Bhumibol Adulyadej's 86th birthday on Thursday.
The police, who had used teargas and rubber bullets against flag-waving protesters over the past few days, handed out roses after removing barricades. The protesters mingled with police, shouted slogans and left peacefully.
"This is a victory but it's not a decisive victory," Suthep said.
"It's a partial victory but it's not final because the Thaksin regime is still in place. You cannot go back home yet. We have to continue our struggle."
The protesters accuse Yingluck of being a proxy for her elder brother, former Prime Minister Thaksin Shinawatra, who was ousted in a 2006 by the military and is currently in self-exile.
Media reports said the protesters were unlikely to continue their campaign on King Bhumibol's birthday, which is traditionally a day of prayer and celebration.
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