According to doctors, at least 12 Sadr supporters were killed and 270 others injured in clashes in the government district. According to eyewitnesses, Sadr supporters and supporters of a rival Shia group exchanged fire. The army used tear gas. The army imposed a nationwide curfew.
In the evening, at least seven grenades hit the so-called Green Zone, according to security circles. It was initially unclear who had fired them. Gunshots were then heard in the government district.
The UN mission in Iraq (Unami) spoke of an "extremely dangerous escalation" and called on the demonstrators to leave the government district immediately. "The survival of the state is at stake," the UN mission said. The US government spoke of "disturbing" reports from Baghdad and urged all sides to remain calm and engage in dialogue.
The protests spread to other parts of the country in the evening. According to AFP reporters and eyewitnesses, Sadr supporters stormed government buildings in the southern cities of Nasiriyah and Hilla, and there were roadblocks in Hilla.
Iraq has been in a political crisis for months. No new government has been formed since the parliamentary elections in October - partly because Sadr's bloc is at odds with the rival Shiite group over who will nominate the next prime minister.
After Sadr's announcement of his withdrawal, his outraged supporters burst into the Palace of the Republic, where they waved Iraqi flags, took selfies, settled into armchairs in a boardroom, or cooled off with a dip in the pool in the building's garden. The cabinet usually meets in the Palace of the Republic.
Iraq's Prime Minister Mustafa al-Kadhemi suspended cabinet meetings "until further notice" and called an urgent security meeting at the military command headquarters. Security and military forces and gunmen are prohibited from shooting at protesters, he said.
For nearly a month, Sadr's supporters have occupied the area around Iraq's parliament in Baghdad. Last week they briefly blocked access to the country's highest court. On posters they called for the dissolution of parliament, new elections and the fight against corruption.
Since the US-led invasion of 2003, Iraq has been governed by a sectarian system of proportional representation, with the prime minister's office reserved for Shiites. The Sadr movement was the strongest force in October's parliamentary elections, but was unable to form a majority. In June, Sadr's MPs all resigned.
The dispute between the rival Shia groups intensified in late July after Sadr's current rejected the candidate of a Tehran-backed alliance, the so-called Coordination Framework. In recent weeks, Sadr and his supporters have called for the dissolution of parliament and new elections.