President's Rule was imposed in Uttarakhand on Sunday, days after nine Congress legislators rebelled against Chief Minister Harish Rawat.
Official sources said President Pranab Mukherjee approved the decision of the cabinet to impose central rule in Uttarakhand.
The cabinet had recommended the central rule on Saturday night after an hour-long meeting chaired by Prime Minister Narendra Modi, the sources said.
The Uttarakhand assembly has been placed under suspended animation on the recommendation of the cabinet, they said. The assembly was to consider a crucial trust vote on Monday.
This is Uttarakhand's first brush with central rule in 16 years of its existence.
Murder of democracy, says Congress
The Congress called the decision on President's Rule a "murder of democracy".
"Neither the ruling of the speaker nor vote on house floor has occurred. Yet President's Rule pre-emptively imposed," Congress spokesperson Abhishek Singhvi tweeted.
'BJP not averse to form government in Uttarakhand'
Meanwhile the Bharatiya Janata Party said it was not averse to trying to form the next government in the hill state.
BJP general secretary Kailash Vijayvargiya told a TV channel that the problems in Uttarakhand were of the making of the Congress leadership and its state leaders.
"It was the weakness of the party, disappointment of the leaders and growing corruption in the state," he said, adding that given an opportunity, the BJP would explore options of forming the government in the state.
Former agriculture minister and important Congress rebel Harak Singh Rawat, said it was immaterial who formed the next state government, "what we want is good governance for the people of Uttarakhand".
"The CM House had become a hot spot of corruption and now that the state is out of the clutches of a corrupt government, we will plan future strategy," he added.