On Monday, Martin Vizcarra dissolved Congress and called early elections, which he said were needed to eradicate the country's “endemic corruption”.
Parliament reacted by approving the one-year suspension of the head of state for "moral disability" and replacing him with Vice President Mercedes Araoz, a 58-year-old economist who took office at the same time.
"We are facing a coup d'état," said Rep. Jorge Del Castillo, an opposition ally, to justify the dissolution of parliament. "I hope the military and police will not join this charade," he added.
The single-chamber parliament will meet again on Friday to vote on a definitive dismissal motion, according to Congressional President Pedro Olaechea.
This crisis is the result of a multi-year political dispute in Peru over how judges are appointed to the Constitutional Court (TC).
The TC, Peru's highest judicial body, is considering the release of opposition leader Keiko Fujimori, the daughter of former President Alberto Fujimori (1990-2000).
Keiko Fujimori has been in jail for 11 months due to a huge corruption scandal involving Brazilian construction company Odebrecht.
Meanwhile, thousands took to the streets in the capital in support of Vizcarra's decision, in a country where almost all living Presidents are implicated in a corruption scandal with the Brazilian construction company.
The current Congress was elected in the 2016 elections for a term ending in 2021, the same five-year term that Pedro Pablo Kuczynski was to serve as Peru's presidency.
Kuczynski resigned last year due to alleged links with Odebrecht.