Poroshenko's dramatic intervention came as opinion polls showed growing public disenchantment with the pro-Western team that took over the leadership of the former Soviet nation after its 2014 pro-Western revolt.
Parliament was already considering today holding a vote of no confidence in the government after first listening to Yatsenyuk account for his 2015 performance and his plans for this year.
A stony-faced Yatsenyuk arrived in parliament just moments after the president's statement was released.
"It is not clear that successful reforms can only be conducted by a government that enjoys sufficiently high public support?" Poroshenko added in a statement on the presidential website.
Also Read
"In order to restore trust, therapy is no longer enough -- you need surgery."
Poroshenko said that all four parties that comprise parliament's current pro-Western coalition should take part "in a complete cabinet reshuffle".
Yatsenyuk's resignation must be approved by parliament -- a step that is highly likely considering the level of lawmakers' dissatisfaction with the current cabinet.
The government's collapse could jeopardise the delivery of a massive IMF-led rescue package aimed at reviving Ukraine's shattered economy and slashing its reliance on Russian financial support.
Yatsenyuk was a passionate foe of Russia who endeared himself to the West by promoting belt-tightening measures that could return growth to the former Soviet state.
But the 41-year-old former banker's vows to clean up the government by cutting its ties to tycoons soon fell flat with voters who accused him of backing the interests of the very billionaires he had vowed to sideline.
"People expected real and quick changes from Yatsenyuk, and they did not come," political analyst Mykola Davydyuk told AFP.