Both the lower and upper houses of parliament are being dissolved. The last parliamentary elections in November and December were heavily rigged by the ruling party, virtually shutting out any opposition representation.
Military leaders, who took over when President Hosni Mubarak stepped down on Friday, said they will run the country for six months or until elections can be held.
The caretaker Cabinet, which was appointed by Mubarak shortly after protests began on Jan. 25, will remain in place until a new Cabinet in formed, which is not expected to happen until after elections.
Meantime, the police, hated for their brutality and corruption under decades-old emergency laws, marched Sunday through Tahrir Square to the Interior Ministry. About 2,000 officers demonstrated and demanded better pay and conditions, but also sought to absolve themselves of responsibility for the police's attempted crackdown at the start of the protests that killed many demonstrators.
Many of the pro-democracy protesters who packed Cairo's Liberation Square returned home, and the tents they camped out in were being removed.
A few scuffles were reported as the tents were taken down, but the scene on Sunday was mostly peaceful.
With the area slowly emptying out, the square is now open to traffic.
Many government institutions also will be reopening soon and Egypt's stock market will be back in business Wednesday.
The Associated Press contributed to this story.