Parliament speaker Volodymyr Lytvyn said leaders of parliamentary factions had met and the coalition partners had failed to submit enough signatures to demonstrate they maintained a majority.
Tymoshenko, the fiery co-architect of the pro-Western Orange Revolution of 2004, remains in office, but faces a vote of no confidence in her government on Wednesday as Yanukovich goes through the steps of consolidating his grip on power.
His victory over Tymoshenko in a Feb. 7 run-off presidential election is expected to tilt the country of 46 million people back toward Russia after years of infighting between the Orange revolutionaries.
Ukraine desperately needs political stability to tackle a debilitating economic crisis that saw GDP contract by 15 percent in 2009, and to restart talks with the International Monetary Fund on a $16.4 billion bailout package.
"In line with the constitution of Ukraine ... I announce that the coalition in Parliament has ceased its activity," speaker Lytvyn told Parliament.
Both a formal announcement of the collapse of the coalition and a motion of no confidence in the government have to occur for Yanukovich's supporters to begin the difficult process of creating a new government.
The collapse of the coalition indicates that the no-confidence vote will pass if coalition members who refused to submit their signatures vote with Yanukovich loyalists.
Weeks of horse trading are expected as Yanukovich's Regions Party works to form its own coalition and, later, a new government. The various parliamentary factions have 30 days to form the new coalition and 60 days to form a new government.
If this proves impossible, Yanukovich has the right to call a new parliamentary election — a scenario feared by investors because it would prolong uncertainty for months as Ukraine continues to struggle without foreign lending.
If Wednesday's vote passes, Tymoshenko stays on as acting premier until a replacement is voted in.
Yanukovich, a beefy ex-mechanic from the Russian-speaking east, has named three likely candidates: reformist former central bank chairman Sergey Tigipko, former foreign minister Arseniy Yatsenyuk and Russian-born former finance minister Mykola Azarov, a close ally of Yanukovich.
Analyst Mikhail Pogrebinski said the key question remained which candidate would lure enough deputies from the loose alliance that makes up the outgoing coalition for Yanukovich's Regions Party to claim a majority in Parliament.
"To dismiss Tymoshenko tomorrow is not a problem, but as for a coalition — that's not clear."
