Sri Lankan President Maithripala Sirisena, who on Sunday reappointed Ranil Wickremesinghe as prime minister after sacking him from the job nearly two months ago, said his move to terminate the premier was done in "good faith" and the reinstatement was done to uphold parliamentary traditions and democracy.

However, Rajapaksa resigned on Saturday after two crucial Supreme Court decisions made his efforts to cling to premiership untenable, paving the way for the return of 69-year-old Wickremesinghe who had refused to step down asserting that his sacking was illegal.

"I did everything after consulting very senior lawyers and former chief justices. I acted in good faith and I will be remembered in the history for this," Sirisena, 67, said addressing Wickremesinghe and his party leaders after administering him the oath of office.

The president said he had sacked Wickremesinghe and called for a fresh election to give 15 plus million voters to exercise their right to vote, but "122 legislators blocked" the effort.

Sirisena, who had earlier vowed to never reinstate Wickremesinghe, said he reappointed him to uphold parliamentary traditions and democracy.

He is expected to swear in the new Cabinet on Monday. "A Cabinet of 30 lawmakers would be appointed within the next 48 hours," Eran Wickremaratne, a senior UNP leader, said.

Earlier, Wickremesinghe's party said it was ready to work with Sirisena, who was "misled by some groups" against the unity government.

Sirisena and Rajapaksa suffered reversal setbacks since October, forcing the president to reinstate Wickremesinghe.

Rajapaksa had sought to secure a majority in the 225-member Parliament but failed. Sirisena then dissolved Parliament and called snap elections on January 5.

However, the Supreme Court overturned his decision and halted the preparations for snap polls.

The Supreme Court on Thursday unanimously declared that the dissolution of Parliament by Sirisena was "illegal".

The apex court on Friday also refused to stay a court order restraining Rajapaksa from holding the office of Prime Minister until it fully heard the case next month.

Rajapaksa signed his resignation letter during a multi-religious service at his home that was attended by several lawmakers of United People's Freedom Alliance (UPFA), Buddhist and other religious leaders.

He said since a general election can no longer be held, the UPFA cannot implement any of the measures they had planned to take "to prevent the country from becoming another Greece."

Rajapaksa said he has no intention of remaining as premier without a general election being held, and in order to not hamper the President in any way, he resigned from the position of Prime Minister and made way for the President to form a new government.

Most of the countries had not recognised Rajapaksa's government. The global credit rating agencies -- the Fitch, the Standard & Poor's and the Moody's -- had also downgraded Sri Lanka's rating owing to the current political crisis.

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