The BJP and Mr Soren's JMM have 18 members each in the 81-member state Assembly. Without the support of the JMM, the government, led by the BJP's Arjun Munda, is in a minority.
Mr Munda met his Cabinet colleagues this morning minus the five JMM ministers. Mr Munda's Cabinet resolved to recommend dissolving the state Assembly.
"Both - decision for dissolving state Assembly and resignation - have been handed over to the Governor. The state Assembly discussed this and the state wants a stable government, the state Assembly also thinks that for the new orders they should go to the public directly. Secondly, for a stable government this is the only alternative," said Mr Munda.
The main point of dispute is over who should be chief minister. The JMM alleges that a pact entitles it to the post this week, half-way through the government's term. But Mr Munda has reportedly denied that this agreement exists.
"We didn't have the numbers in Jharkhand, therefore we have chosen to quit the office rather than doing manipulative majority in the Assembly," said BJP leader Balbir Punj in New Delhi.
Mr Soren is mum about the future course of action, but JMM sources hinted that the party will try and form a new government in the state.
Meanwhile, the Congress is hopeful. "Our stand was very clear that after withdrawal from BJP, definitely we will start the dialogue to form the government. I think now the time has come, we are hoping that some proposal may come from JMM," said Jharkhand Congress president Pradeep Balmuchu. The party has 13 state legislators.
In a state that has seen eight governments in the last 12 years, all eyes are now be on the Governor Syad Ahmad. He can either decide to act on the outgoing Cabinet's recommendation and dissolve the Assembly waits for another combine to stitch up an alliance.