The decision by the African National Congress’s (ANC) national executive to “recall” Mr Zuma followed a night of negotiations and tense meetings with senior officials.
The 75-year-old leader is under intense pressure to step down and, if he refuses, faces a vote of no confidence in parliament.
Ace Magashule, secretary-general of the African National Congress (ANC), said the party’s national executive committee has decided to “recall” Mr Zuma, who has been left discredited by a number of corruption scandals.
Mr Magashule said the president had previously agreed to resign, but wanted to stay in office for several more months, a condition that the party committee rejected.
If Mr Zuma refuses to co-operate, the matter could go to parliament for a vote on a motion of no confidence.
During the course of the night Mr Zuma met with his presumed successor, deputy president Cyril Ramaphosa.
Mr Zuma, a polygamous Zulu traditionalist with no formal education, has been living on borrowed time since Ramaphosa, a union leader and lawyer once tipped as Mandela’s pick to take over the reins, was elected as head of the 106-year-old ANC in December.
Ramaphosa narrowly defeated Mr Zuma’s ex-wife and preferred successor, Nkosazana Dlamini-Zuma, in the leadership vote.
Despite the decision to order Mr Zuma’s “recall”, South African media are speculating that he may yet defy the party’s wishes, forcing it into the indignity of having to unseat him in parliament.
Shortly before midnight, the SABC state broadcaster said Mr Zuma had been told in person by Ramaphosa that he had 48 hours to resign. A senior party source later told Reuters Zuma had made clear he was going nowhere.
“Cyril went to speak with him,” the source said, adding that the discussions were “tense and difficult”. “We decided to recall Zuma. He hasn’t been told yet,” they said.
The ANC is expected to hold a media briefing in the afternoon to reveal the results of the meeting.
One domestic report said Mr Zuma had asked for three months to resign, a request that was denied. Another report said Zuma simply told Ramaphosa: “Do what you want to do”.
Mr Zuma, who took office in 2009 and is in his second five-year term, has asked for state security for his family, payment of legal fees and a few more months in office in exchange for quitting, said South African media.
The leader has been discredited by scandals, although he denies wrongdoing.
South Africa‘s top court ruled that he violated the constitution following an investigation of multimillion-dollar upgrades to his private home that were paid by the state; a judicial commission is about to start a probe of alleged looting of state enterprises by some of his associates; and prosecutors are expected to announce soon whether they will reinstate corruption charges tied to an arms deal two decades ago.
The country’s economy has stagnated during Zuma’s nine-year tenure, with banks and mining companies reluctant to invest because of policy uncertainty and rampant corruption. However, since Ramaphosa emerged as an ANC leadership prospect in November, economic confidence has started to pick up.