Ali Abdullah Saleh, who stepped down yesterday after 33 years as Yemen's president, plans to leave in a few days with family members and settle in Ethiopia.
Protests in Yemen as Saleh formally steps down
Aides to Mr Saleh and diplomats in Sanaa said there was mounting pressure on him to leave the country so the new government could operate without his meddling.
"There is an understanding here that his stay in the country might spark violence and undermine the transition. It is for his and the country's interest that he stays outside the country," said a diplomat.
In a ceremony at the presidential palace yesterday attended by parliamentarians, tribal leaders and foreign dignitaries, Mr Saleh formally handed over power to his deputy, Abdrabu Mansur Hadi.
"I hand over the banner of the revolution, of the republic, of freedom, of security and of stability ... to safe hands," Mr Saleh said.
Mr Saleh vowed to "stand ... by my brother the president of the republic" and urged Yemenis to rally behind Mr Hadi in his fight against "terrorism, first and foremost, Al Qaeda".
Mr Hadi vowed to hand over power to an elected president after a two-year period, during which a new constitution would be drafted and the army would be restructured.
"I hope we will meet in this room again ... to bid farewell and welcome a new leadership. I hope that in two years, I will stand in President Ali Abdullah Saleh's place and a new president will stand in mine,"
Mr Hadi said. He was elected in a presidential poll in which he received 99.8 per cent of the votes cast in an election that had a 60 per cent nationwide turnout.
Mr Hadi had taken the oath of office in Yemen's parliament on Saturday, and in his first speech as the new leader he vowed to fight Al Qaeda and restore security.
"It is a patriotic and religious duty to continue the battle against Al Qaeda," he said. "If we don't restore security, the only outcome will be chaos."
Under a GCC-brokered deal, Mr Saleh transferred power to Mr Hadi in return for immunity from prosecution. Mr Saleh signed the plan in November after 10 months of protests demanding his removal.
The main opposition coalition, the Joint Meeting Parties, which is leading the unity government, boycotted yesterday's ceremony, saying on Sunday that Mr Hadi officially became president after winning the election last week, not because Mr Saleh handed him power.
Tens of thousands of protesters marched to the residence of Mr Hadi yesterday, chanting "the people want the prosecution of the mass killer", referring to Mr Saleh and the deaths of hundreds of protesters in the past year.
They also shouted "We have voted for Abdrabu, We do not want a president next to him", meaning that they do not want Mr Saleh to interfere while Mr Hadi runs the government.
Protesters marched in other cities in Yemen, also demanding that Mr Salehn be prosecuted and that his family members be dismissed from their powerful positions in the military.
Mr Saleh is the fourth Arab leader to leave office since the beginning of the Arab Spring uprisings that forced the resignation of the leaders of Tunisia and Egypt, and led to the death of Libya's dictator, Muammar Qaddafi.
* With additional reporting by Agence France-Presse and the Associated Press