The resignation of the five ministers, which were announced but not yet formally tendered, drew the wrath of premier Enrico Letta, who accused Berlusconi of a "crazy" gesture aimed at covering up his personal affairs.
The five-month-old government has teetered for weeks since the high court confirmed Berlusconi's tax fraud conviction.
Berlusconi's centre-right People of Liberty Party is part of an unusual coalition of rival forces with Mr Letta's centre-left Democratic Party, but the resignations signal the end of the alliance.
The resignations must be formally submitted to President Giorgio Napolitano, who must decide if there is any way to continue the government or if new elections must be held.
The announcement of resignations came after Berlusconi urged ministers in his party to step down if the government does not revoke an increase to Italy's value-added tax that takes effect next week.
Tensions were already rising around a senate committee vote later this week on whether to revoke Berlusconi's legislative seat because of the tax fraud conviction.
Mr Letta said Berlusconi was forcing the government's hand on the sales tax.