* ZANU-PF to dismiss Mugabe, reinstate Mnangagwa -sources
* State TV says Mugabe to meet army commanders on Sunday
* Zimbabweans celebrate 93-year-old’s expected fall
* Military seized power on Wednesday (Updates with report that Mugabe will meet army chiefs, edits throughout)
By Joe Brock and MacDonald Dzirutwe
HARARE, Nov 18 (Reuters) - Zimbabwe’s ruling party will dismiss President Robert Mugabe on Sunday and reinstate Emmerson Mnangagwa, the vice-president he fired, two party sources told Reuters on Saturday, as ecstatic crowds celebrated the expected downfall.
Mugabe’s 37-year rule has been effectively at an end since the army seized control on Wednesday, confining him to his residence, saying it wanted to target the “criminals” around him.
State television said Mugabe would meet military commanders on Sunday, quoting Catholic priest Fidelis Mukonori, who has been mediating in negotiations with the president.
But hundreds of thousands of people had no need for a formal signal that his time had ended as they flooded the streets of Harare, singing, dancing and hugging soldiers.
In scenes reminiscent of the downfall of Romanian dictator Nicolae Ceausescu in 1989, men, women and children ran alongside the armoured cars and the troops who stepped in this week to oust the only ruler Zimbabwe has known since independence in 1980.
Others marched towards his lavish ‘Blue Roof’ residence, but were kept away by soldiers.
Under house arrest in his compound, the 93-year-old has watched support from his party, security services and people evaporate in less than three days.
The sources said a ZANU-PF party central committee meeting scheduled for 10:30 a.m. (0830 GMT) would also dismiss 93-year-old Mugabe’s preferred successor, his wife Grace, from her role as head of the ZANU-PF Women’s League.
Mugabe’s nephew Patrick Zhuwao, speaking from an undisclosed location in South Africa, told Reuters the leader and his wife were “ready to die for what is correct” rather than step down in order to legitimise what he described as a coup.
Zhuwao also said that only Mugabe, who had hardly slept since the military took over but was otherwise in “good” health, could call a meeting of the central committee.
It was not clear from reading the party’s constitution who is empowered to call such a meeting - but events appeared to have made the issue irrelevant.
On Harare’s streets, Zimbabweans spoke of a second liberation for the former British colony, alongside their dreams of political and economic change after two decades of deepening repression and hardship.
“These are tears of joy,” said Frank Mutsindikwa, 34, holding aloft the Zimbabwean flag. “I’ve been waiting all my life for this day. Free at last. We are free at last.”
Mugabe’s downfall is likely to send shockwaves across Africa, where a number of entrenched strongmen, from Uganda’s Yoweri Museveni to Democratic Republic of Congo’s Joseph Kabila, are facing mounting pressure to step aside.
The crowds in Harare have so far given a quasi-democratic veneer to the army’s intervention, backing its claims that it is merely effecting a constitutional transfer of power, which would help it avoid the diplomatic backlash and opprobrium that normally follows a coup.
The military had been prompted to act by Mugabe’s decision to sack Mnangagwa, Grace Mugabe’s main rival to succeed her husband. The next presidential election is due next year.
Zimbabweans abroad were also hailing the end of Mugabe’s rule, not least the hundreds living in Britain who gathered outside their embassy in central London.
“I’m ecstatic to see people give Mugabe a reality check because he has been in his echo chamber for too long, lying to himself that people still want him,” said Ruva Kudambo, 37, who came to study technology and ended up staying.
Tasa, a 36-year-old who refused to give his family name, said he had brought his four young children, aged 5 to 9, to the protest “because they are the future of Zimbabwe”.
For some Africans, Mugabe remains a nationalist hero, the continent’s last independence leader and a symbol of its struggle to throw off the legacy of decades of colonial subjugation.
But to many more at home and abroad, he was reviled as a dictator happy to resort to violence to retain power and to run a once-promising economy into the ground.
Political sources and intelligence documents seen by Reuters said Mugabe’s exit was likely to pave the way for an interim unity government led by Mnangagwa, a life-long Mugabe aide and former security chief known as “The Crocodile”.
Stabilising the free-falling economy will be the number one priority, the documents said.
The United States, a long-time critic of Mugabe, said it was looking forward to a “new era” in Zimbabwe, while President Ian Khama of neighbouring Botswana said Mugabe had no diplomatic support in the region and should resign at once.
The Herald, the state newspaper that has served as Mugabe’s loyal mouthpiece, said ZANU-PF had called on Friday for him to go. It said ZANU-PF branches in all 10 provinces had also called for the resignation of Grace, the first lady whose ambitions to succeed her husband outraged the military and much of the country.
To many Zimbabweans, she is known as “Gucci Grace” on account of her reported dedication to shopping, or - in the wake of an alleged assault in September on a South African model - “Dis-Grace”.
The scenes in Harare reflect the anger and frustration that has built up among Zimbabwe’s 16 million people in nearly two decades of economic mismanagement that started with the seizure of white-owned farms in 2000, the catalyst of a wider collapse.
The central bank tried to print its way out of trouble by unleashing a flood of cash but that only made matters worse, leading to hyperinflation that topped out at 500 billion percent in 2008.
At least 3 million Zimbabweans emigrated in search of a better life, most of them to neighbouring South Africa.
After stabilising briefly when Mugabe was forced to work with the opposition in a 2009-2013 unity government, the economy has collapsed again, this time due to a chronic shortage of dollars.
In October, monthly inflation leapt to more than 50 percent, according to some economists, putting basic goods beyond the means of many in a country with 90 percent unemployment.
Mugabe’s only public appearance since the military took over was at a university graduation ceremony on Friday morning. Decked out in blue and yellow academic gowns, he appeared tired, at one point falling asleep in his chair.
A senior member of ZANU-PF said it was only a matter of time before he agreed to go.
“If he becomes stubborn, we will arrange for him to be fired on Sunday,” the source said. “When that is done, it’s impeachment on Tuesday.”
Additional reporting by Ed Cropley in Johannesburg and Emelia Sithole-Matarise in London; Writing by Ed Cropley, Alexander Winning and James Macharia; Editing by Hugh Lawson and Kevin Liffey