Guinea-Bissau has been in the throes of a power struggle since August 2015, when President Jose Mario Vaz sacked former prime minister Domingos Simoes Pereira.
Embalo, who became prime minister in December 2016, tendered his resignation to Vaz last week, he told AFP late Saturday.
“I am not someone who clings to power. If the president does not trust me, I won’t wait to be fired, I will leave,” he said.
A source at the presidency confirmed the resignation had been submitted.
At its latest summit on December 16, the ECOWAS west African bloc urged Guinea-Bissau’s leaders to resolve the crisis marring their tiny nation within two months, or else face sanctions.
Vaz and former prime minister Pereira — who heads the ruling party — have accused each other of blocking the implementation of an accord reached in October 2016, following talks mediated by Alpha Conde, president of neighbouring Guinea.
The agreement had envisaged naming a new prime minister “who had the president’s trust”, and who would maintain his position until elections to be held in 2018.
The UN Security Council in September also asked the leaders of the former Portuguese colony to hold talks and to revise the constitution.
Under the current constitution, the choice of prime minister rests with the ruling party — the African Party for the Independence of Guinea and Cape Verde (PAIGC), of which Vaz is a member.
But because the PAIGC lost its parliamentary majority, Vaz has sought backing from MPs from the second party, along with 15 rebels from the ruling party.
Guinea-Bissau, one of the world’s poorest countries, has been plagued by military coups and instability since its independence from Portugal in 1974.
President Joao Bernardo Vieira was assassinated in 2009 alongside General Tagme Na Waie.