Mursi was sequestered in a Republican Guard barracks after denouncing a "military coup" that stripped him of power after just a year. As tanks and troops secured the area, tens of thousands of supporters of his Muslim Brotherhood rallied nearby to protest against his removal.
Mursi's dramatic removal after a year in office as Egypt's first freely elected president marked another twist in the turmoil that has gripped the Arab world's most populous country in the two years since the fall of Hosni Mubarak.
The liberals' chief negotiator with the army, former U.N. diplomat Mohamed ElBaradei, said the program agreed with the generals during talks on Wednesday would ensure the continuation of the Arab Spring revolution of 2011.
Claiming a mandate from the people, millions of whom have protested against political upheaval and economic stagnation under Brotherhood rule, armed forces chief General Abdel Fattah al-Sisi said Mursi had failed to meet demands for national unity.
"Those in the meeting have agreed on a roadmap for the future that includes initial steps to achieve the building of a strong Egyptian society that is cohesive and does not exclude anyone and ends the state of tension and division," Sisi said in a solemn address broadcast live on state television.
He said the security forces would keep order. There were scattered clashes between rival factions around the country but so far nothing on the scale of violence in which more than 40 people have been killed and hundreds wounded in recent weeks.
Security sources said at least four died on Wednesday.
References to the popular will, and the presentation of a united political front with a civilian face - which will take fuller shape on Thursday with the swearing in of the head of the constitutional court as interim head of state - clearly aims at scotching concerns abroad that this was a military coup d'etat.
The United States had backed Mursi's assertions to be the legitimate leader but had grown increasingly insistent that he share power with his opponents. Washington funds Sisi's army to the tune of $1.3 billion a year and could face questions on imposing sanctions if Mursi were deemed to be the victim of a coup.
The United States, as well as neighboring Israel, and other powers are all watching anxiously to see whether Egypt, with its population of 84 million, powerful army and control of the Suez Canal, can stabilize itself.
Reflecting the hopes of the "revolutionary youth" who led the charge against Mubarak, only to see the electoral machine of the Brotherhood dominate the new democracy, the young man who proved Mursi's extraordinary nemesis said the new transitional period must not repeat the mistakes of the recent past.
"We want to build Egypt with everyone and for everyone," said Mahmoud Badr, a 28-year-old journalist who first had the idea two months ago for a petition calling on Mursi to resign. By last weekend, the "Tamarud - Rebel!" movement was claiming 22 million backers, many of whom were on the streets on Sunday.
ULTIMATUM
The army had already grown increasingly alarmed about Mursi dragging Egypt into the sectarian conflict in Syria and the turnout on the streets gave Sisi his justification for handing the president a 48-hour deadline to share power or lose it.
Mursi was the first of the mostly Islamist leaders who have taken power since the Arab Spring uprisings against autocratic leaders to be deposed in his turn. It will pose questions for others across the region, most immediately in Tunisia.
On Tahrir Square, cradle of Egypt's January 25 Revolution in 2011, huge crowds in the hundreds of thousands set off fireworks and partied, chanting: "The people and the army are one hand!"
The past four days have seemed to many like a fast-motion rerun of the 18 days that brought down Mubarak, when the army which had long backed him realized his time was up.
Sisi announced the immediate suspension of the Islamist-tinged new constitution and a roadmap for a return to democratic rule under a revised rulebook.
The constitutional court president will replace Mursi. A technocratic government will rule until new presidential and parliamentary elections are held - no time frame was set.
The constitution will be reviewed by a panel representative of all sections of society in the biggest Arab nation. Media freedoms, under threat during Mursi's rule, would be protected.
Sisi mentioned Mursi by name only in a preamble in which he detailed how the armed forces chief - appointed by the president last year - had repeatedly tried to persuade him to end the deep polarization of Egypt's politics. The president, he said, had "failed to meet the demands of the Egyptian people".
TAHRIR ERUPTS
After he spoke, hundreds of thousands of anti-Mursi protesters in central Cairo's Tahrir Square erupted into wild cheering, setting off fireworks and waving flags. Cars drove around the capital honking their horns in celebration.
But a statement published in Mursi's name on his official Facebook page after Sisi's speech said the measures announced amounted to "a full military coup" and were "totally rejected".
A shaky, hand-held video lasting 20 minutes appeared briefly online, showing Mursi speaking at a desk. He had pledged in an overnight broadcast to give up his life rather than relinquish his democratically elected responsibilities. In the new video, he said: "There is no other legitimacy, and it cannot be.
"I do not accept this at all," he said, while also urging his supporters not to take up arms as some have sworn to do.
The president was at a Republican Guard barracks surrounded by barbed wire, barriers and troops, but it was not clear whether he was under arrest. The state newspaper Al-Ahram said the army told him at 7 p.m. (1700 GMT) that his term was over.
The Brotherhood's Egypt25 television station, broadcast live coverage of a rally of tens of thousands of Mursi supporters, even as the army moved tanks to prevent them from marching on the presidential palace or the Republican Guard barracks.
But within an hour of Sisi's announcement it was off air.
ALIENATION
U.S. oil prices rose to a 14-month high above $100 a barrel partly on fears that unrest in Egypt could destabilize the Middle East and lead to supply disruption.
The massive anti-Mursi protests showed that the Brotherhood had not only alienated liberals and secularists by seeking to entrench Islamic rule, notably in a new constitution, but had also angered millions of Egyptians with economic mismanagement.
Earlier, Mursi's spokesman said it was better that he die in defense of democracy than be blamed by history.
"It is better for a president, who would otherwise be returning Egypt to the days of dictatorship, from which God and the will of the people has saved us, to die standing like a tree," spokesman Ayman Ali said, "Rather than be condemned by history and future generations for throwing away the hopes of Egyptians for establishing a democratic life."
Liberal opponents said a rambling late-night television address by Mursi showed he had "lost his mind".
The official spokesman of the Muslim Brotherhood said supporters were willing to become martyrs to defend Mursi.
"There is only one thing we can do: we will stand in between the tanks and the president," Gehad El-Haddad told Reuters at the movement's protest encampment in a Cairo suburb that houses many military installations and is near the presidential palace.
But the Brotherhood also has a more than eight-decade history of survival under threat and may take a long view of whether it is better to draw in its horns and watch others try to reform Egypt's sclerotic economy.
The army is deeply concerned about its own vast economic interests, built up over six decades in which it has been the power behind successive thrones. Highly popular among Egyptians, it may retreat behind civilian faces but, as Wednesday's events showed, it will remain crucial in the political transition.
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