Senior PML-N leader and former petroleum minister Shahid Khaqan Abbasi will run the PML-N government as interim prime minister of Pakistan until Shahbaz is elected as member of parliament.
Sharif defiantly spoke to supporters on Saturday after Pakistan's Supreme Court ruled on Friday he would not be fit for office, due to an investigation into alleged corruption charges against his family.
Shahbaz Sharif, now the chief minister of Punjab province, which is Pakistan's most populous region and the Sharif's political heartland, will have to resign from that post and run for a by-election to join parliament before he is elected as prime minister.
According to party sources, it was a hard decision to bring Shehbaz to Islamabad as it may create political vacuum in Punjab, which PML-N can not afford ahead of next year elections.
Although opposition leader Imran Khan is the main beneficiary of the court's removal of the prime minister by the judiciary, he could not stop Sharif party from powerful role in the politics, she told Xinhua.
Meanwhile, the opposition has welcomed the Supreme Court's ruling against Sharif as a sign of progress and greater accountability in the country.
"Following the verdict, Nawaz Sharif has divested himself of his responsibility as prime minister", a spokesman for Mr Sharif's office said in a statement.
Lok Sabha adjourned amid ruckus over suspension of MPs
Soon after the house met at 2.30 p.m., the opposition members rushed towards the Speaker's podium protesting against her decision. Speaker suspended and adjourned the Lok Sabha till 2:30.
He noted that all who "looted the nation's wealth should face a similar court action".
Nawaz Sharif, who was in the a year ago of his third term, has been ousted twice before, the last time after trying to remove army chief Pervez Musharraf.
There is no doubt that Nawaz Sharif's disqualification will have a negative impact on the internal and external policies he had been pursuing as the prime minister.
"Different options were discussed in a similar meeting yesterday but no decision was taken", he said.
Hence, Abbasi has been named as interim prime minister who will resign once Shehbaz is elected.
New elections would be held in Nawaz Sharif's former constituency which is based in the PML-N powerbase of the Punjab process which could take up to 45 days. Most civilian prime ministers in Pakistan have never completed their constitutional term. It also directed the Election Commission of Pakistan to issue a notification declaring the Nawaz's disqualification. Shehbaz will steer the country until the next General Election scheduled for 2018.
Other prime ministers have been ousted through votes of no-confidence in parliament, the dissolution of the assemblies by the military or in direct military coups.