The Nauru President Rene Harris has been ousted in a vote of no confidence in parliament and replaced by the former president and veteran politician, Bernard Dowiyogo.
In a statement, opposition MPs have blamed the Harris government for Nauru's decline from one of the wealthiest Pacific countries, through its phosphate mining, to the poorest.
Opposition MPs say that during Mr Harris' two year presidency there have been shortages of water, food and petrol, while government workers were not paid for long periods, causing many of them to resign.
They also say that the last two years has seen the bankruptcy of the Bank of Nauru and allegations by international agencies that Nauru is involved in money laundering.
There has also been unrest over the decision to help out Australia by accepting over 1-thousand refugees in return for increased aid.