Finland is the current holder of the EU's rotating presidency and the chairing duties of the Council meeting were taken on by Croatia, which is due to take over in January anyway.
Social Democrat Rinne found himself in a hard place after the Finnish Centre Party, one of the coalition parties, chose to withdraw its backing for Rinne on Monday, saying its party had lost confidence in coalition with the prime minister.
Finnish Prime Minister Antti Rinne resigned on Tuesday (3 December) after his handling of a postal strike soured relations between him and a member party of the ruling five-party coalition.
Just over half an hour later, Niinistö accepted Rinne's resignation at the presidential residence, Mäntyniemi.
It is not clear if Rinne was forced to resign or made a decision to do so himself.
"All of the governing parties have confidence in me, except the Center Party".
"There has been lack of trust shown by the Center Party and in discussions today they detailed reasons for that", Rinne said in his resignation statement.
"The most probable (scenario) is that they will carry on, with the same government programme" but possibly changing a few cabinet ministers, she told AFP.
Niinisto thanked Rinne for "the short, but many moments of good cooperation".
Rinne, who used to be a trade union leader, and Sirpa Paatero were accused of giving inaccurate and contradictory information in the run-up to the strike, specifically over the transfer of work contracts for 700 Posti package handlers, which effectively would have led to lower pay.
The strike spread to the national airline, Finnair, and to other industries before being settled last week.
Forced out: Earlier Tuesday, Finland's Center Party said it had lost confidence in Rinne. "Losing confidence" is not a formal procedure in Finland, like a vote of no-confidence one sees in other parliamentary-governed nations.
EU ramifications: The political crisis in Finland comes at an awkward time for the European Union. The head of state has asked the current administration to remain in place, as the parliament is expected to appoint a new prime minister next week. Sanna Marin, a member of Rinne's Social Democrats and Finland's transport and communications minister, is seen as a frontrunner to replace the prime minister.
If all five coalition partners agree to be on board, it is customary that the election victor, in this case the Social Democrats, are given the first attempt to win approval for a new prime minister and form a government.