The Huthi militia said it would set up a national council of 551 members to replace the legislature in the violence-wracked country, a key US ally in the fight against Al-Qaeda.
The heavily armed Huthis swept into Sanaa from their northern stronghold in September.
Last month they seized the presidential palace and key government buildings in what authorities called a coup attempt.
That plunged the country deeper into crisis and prompted President Abedrabbo Mansour Hadi and Prime Minister Khalid Bahah to tender their resignations.
The Huthis’ announcement came after a Wednesday deadline set by the militia for political parties to resolve the crisis passed with no agreement.
The five-member presidential council will form a transitional government to govern for two years, the Huthis announced in a “constitutional declaration” attended by tribal and military representatives as well as the outgoing interior and defence ministers.
Yemen has been riven by instability since the Arab Spring-inspired uprising that forced autocratic president Ali Abdullah Saleh from power in 2012.
Saleh has been accused of backing the Huthis, as has Shiite-dominated Iran.
The turmoil has raised fears that Yemen, which lies next to oil-rich Saudi Arabia, could become a failed stated- AFP