Yildirim -- a longstanding and faithful ally of Erdogan -- is the only candidate at an extraordinary congress of the ruling Justice and Development Party (AKP) today that will choose the party chairman, meaning he will become prime minister.
His main task in the post, observers say, will be to push through a change in the constitution to transform Turkey from a parliamentary to a presidential system, placing more power in Erdogan's hands.
Divisions between Davutoglu and Erdogan had been boiling for months over a series of issues including Turkey's peace process with the Kurdish militants, an accord with the European Union on refugees and the shift from parliamentary to presidential system.
Analysts expect that Yildirim -- who has never stepped out of line with the president on a policy issue -- will prove a far more pliable figure for the president and allow Erdogan to further consolidate his powers.
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"Yildirim could be the last prime minister of Turkey..," said political commentator Gokhan Bacik. "He will only have the role of deputy to Erdogan in the (presidential system) that he wants to put in place".
Erdogan's critics have accused him of authoritarian behaviour, pointing to the growing number of investigations pursued against journalists along with a highly controversial bill adopted by parliament yesterday that would lift immunity for dozens of pro-Kurdish and other MPs and could see them evicted from parliament.
Another critical task facing the new prime minister will be to negotiate with the European Union on a crunch visa deal, a key plank of an accord aimed at easing the EU's migrant crisis.
The visa deal has been in jeopardy over Ankara's reluctance to alter its counter-terror laws, a requirement of the agreement, prompting Erdogan to make a series of critical statements about the EU in recent weeks.
Yildirim vowed last week to "rid Turkey of the calamity of terrorism" during a symbolic visit to the mainly Kurdish city of Diyarbakir in the southeast.
Yildirim worked as head of the Istanbul ferry company while Erdogan was mayor of the city in the second half of the 1990s. After the conservative Islamic-rooted AKP won power, he served an almost unbroken stint from 2002 to 2013 and again from 2015 as transport minister.