So the former president made a decision to step down after the court ruling given on Friday and on Thursday.
Speculation had been rife that the government will resign after waiting for the Supreme Court judgement today in their appeal against lower court order restraining them from functioning in their posts.
Mr Rajapaksa said in a statement: "Since I have no intention of remaining as prime minister without a general election being held, and in order to not hamper the president in any way, I will resign from the position of prime minister and make way for the president to form a new government".
The country was taken by surprise when Sirisena sacked Wickremesinghe on October 26, nearly two years before his five-year term was up and called a snap election for January 5.
Meanwhile, a lawyer on behalf of Ranil Wickremesinghe has filed a motion before the Supreme Court requesting a five-member judge panel for the hearing of the aforementioned appeal.
Sirisena then named Rajapaksa the new prime minister, but Parliament twice rejected the appointment.
However, the Supreme Court overturned his decision and halted the preparations for snap polls.
The apex court on Thursday unanimously declared that the dissolution of Parliament by Sirisena was "illegal".
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The pro-Rajapaksa lawmaker, Lakshman Yapa Abeywardena, said Friday that Rajapaksa decided in a meeting with President Maithripala Sirisena to resign to allow the president to appoint a new government.
Earlier, Sirisena had refused to reinstate Wickremesinghe saying he had serious cultural and policy differences with him.
The leftist JVP, or the People's Liberation Front, insists that Sirisena should be investigated for orchestrating what they call a coup and that there should also be an impeachment process.
Earlier this week, the island nation's parliament passed a vote of confidence in favour of Wickremesinghe, as it sought his reinstatement as prime minister by the president to defuse the political crisis.
Many foreign countries have not recognised Rajapaksa's government.
Mr. Wickremsinghe will be sworn in again to the post of Prime minister tomorrow along with his cabinet.
His party and its allies have a simple majority in parliament - and have argued from the beginning that President Sirisena's actions were unconstitutional.