The announcement came after months of negotiations over forming a coalition between the government of Victor Yanukovych, the prime minister, and the party of Viktor Yushchenko, the president.
Tetiana Mokridi, the party spokeswoman, said: "The Our Ukraine party is going into opposition to the government and will propose to the president that he recall ministers who are members of this party."
The lengthy talks mean that Our Ukraine is still not formally a member of the governing coalition despite the fact that three of its members sit on the 23-person cabinet.
Our Ukraine controls the justice and youth and sports ministers. The foreign minister - who is appointed by the president - is also a member of the party.
"The negotiation process is finished," Roman Bezsmertny, head of the Our Ukraine bloc in parliament, said.
"For better or worse, everyone involved in this process has made their choice. There is a governing coalition and there is Our Ukraine which is in opposition to this coalition".
Yanukovich lost the presidential
election to Yushchenko in 2004
Yanukovych's Party of the Regions won by far the most votes of any party in legislative elections last March and he controls a coalition with the Socialist party and the Communist party which is capable of governing whether Our Ukraine supports them or not.
Yushchenko and Yanukovych were bitter rivals in the 2004 presidential campaign when fraud triggered the Orange Revolution mass protests that helped bring Yushchenko to power.
Since becoming president, Yushchenko has tried to steer his country away from Russia's historical influence and towards Nato and the European Union.
His efforts have been hampered by infighting among his supporters, political opposition and resistance from the country's large Russian-speaking population.
Yushchenko and Yanukovych reached a deal last August under which the president agreed to make his adversary the new prime minister provided he agreed to stick to the pro-Western foreign policy launched two years ago.
But on a visit to Brussels last month, Yanukovych announced that Ukraine was not prepared to accelerate moves towards joining Nato and that a "pause" was necessary in the process.
Yushchenko responded by saying that the declaration was not in Ukraine's national interest and demanded that Yanukovych immediately "correct" his position.