The country’s ruling Zanu-PF party confirmed the southern African nation’s 93-year-old president had been “detained” in a “bloodless transition”.
Soldiers had earlier seized the country’s state TV station after tanks rolled into capital Harare.
The military has seized control in Zimbabwe and has said President Robert Mugabe, in power since 1980, is safe.
After seizing state TV, an army spokesman announced it was targeting people close to Mr Mugabe who had caused “social and economic suffering”. Messages attributed to a ruling party Twitter account described the takeover as a “bloodless transition”.
The move came after Mr Mugabe sacked his deputy, Emmerson Mnangagwa, in favour of his wife. A statement read out by a general on air denied it was a coup and said Mr Mugabe was safe, but did not say where.
Heavy gun and artillery fire could be heard in northern parts of the capital Harare early on Wednesday.
Vice-president Emmerson Mnangagwa has been installed a leader, a Twitter statement from the party said.
It said “Zimbabwe was not owned by Mugabe or his wife” – a reference to Grace Mugabe, who the statement accuses of “taking advantage” of the elderly despot.
She was widely accused of running the country for infirm Mugabe and feared to be plotting a power grab when he died.
The army finally stepped in yesterday after Mugabe fired popular number two Mnangagwa, his probable successor, last week.
It raised fears he was plotting to install 52-year-old Grace as leader.
The Zanu-PF statement added: “Last night the first family was detained and are safe, both for the constitution and the sanity of the nation this was necessary.
“Today begins a fresh new era and comrade Mnangagwa will help us achieve a better Zimbabwe.”
Mugabe was long seen as a hero of African independence movements after wresting control from Britain in 1980.
But the tyrant earned notoriety for allowing the persecution of white farmers that led to dozens of murders in the 1990s.
He also presided over a hyperinflation disaster that saw the country’s currency sink in value by 79 BILLION per cent – sending millions of Zimbabweans into poverty and lowering the life expectancy from 61 to 40.
The former British colony left the Commonwealth in 2003 on Mugabe’s orders.
He earned a reputation for falling asleep during high-level diplomatic meetings in his later years – once being snapped snoozing at the United Nation.
The leadership crisis reached a head over night when soldiers stormed the national TV station and told the nation the army was “targeting criminals” and was not planning “a military takeover of government”.
Named as Major General S.B. Moyo, he added that tyrant Mugabe and his family were “safe and sound” but warned “any provocation will be met with an appropriate response”.
The dramatic scenes came as heavy gunfire and shellfire was reported in capital Harare in the early hours of this morning.
The UK Foreign Office responded by telling Brits in the country to remain indoors.
Major Moyo added: “We are only targeting criminals around who him who are committing crimes that are causing social and economic suffering in the country in order to bring them to justice.
“As soon as we have accomplished our mission, we expect that the situation will return to normalcy.”