"I told Yingluck that this is the only and last time I see her until power is handed over to the people," protest leader and former deputy prime minister Suthep Thaugsuban said in a televised speech.
"I told her the only solution is to hand over power to the people.
"There will be no bargaining and it must be finished in two days."
The meeting, which was held in secret in the presence of the army, navy and air force commanders, followed an eruption of violence in the Thai capital Bangkok.
Protesters step up anti-government action on 'V-Day'
Thousands of protesters launched a "people's coup" on Ms Yingluck's government on Sunday, swarming multiple state agencies in violent clashes, taking control of a state broadcaster and forcing the prime minister to flee a police compound.
Protest leaders declared Sunday "V-Day", and urged supporters to seize 10 government offices, six television stations, police headquarters and the prime minister's offices.
Hundreds of demonstrators also seized control of state broadcaster Thai PBS, waving flags and tooting whistles.
More than 250 mostly black-shirted protesters gathered in the parking lot, as others streamed in.
Police say about 30,000 anti-government protesters gathered in at least eight locations.
In three of them, police used tear gas and water canons against people hurling stones, plastic water bottles and other projectiles.
"Police and protesters still haven't come face to face. The use of tear gas is part of our procedures," national police spokesman Piya Utayo said on television.
Two killed, dozens injured in overnight clashes
Authorities have deployed more than 2,700 troops to reinforce security in Bangkok, the first time a significant number of soldiers have been deployed to cope with the unrest.
The move follows Saturday-night clashes between supporters and opponents of Ms Yingluck near a sports stadium where about 70,000 Red Shirt government supporters had gathered.
Five major shopping malls closed their doors across Bangkok, underscoring the widening economic impact of the protests.
One Red Shirt government supporter was shot and killed outside the stadium early on Sunday, after a 21-year-old student was fatally shot several hours earlier.
The circumstances are unclear but the violence comes after an anti-government mob attacked Red Shirts arriving to join the rally in Ramkhamhaeng district.
They are the first deaths since the mostly peaceful demonstrations began a month ago. Both sides blame each other for attacking their supporters.
The violence has prompted Red Shirt leaders to end their rally, which had drawn tens of thousands of mainly rural poor in support of Ms Yingluck and her brother Thaksin, who lives in self-imposed exile but remains a hugely divisive figure in Thailand.
"In order to avoid further complicating the situation for the government, we have decided to let people return home," Red Shirt leader Thida Thavornseth told the crowd.
Protest leader calls for non-violent demonstrations
But Suthep Thaugsuban, the leader of the anti-government demonstrators, has vowed to push ahead with planned marches on several key sites.
"Our operation today must be peaceful and non-violent... enter places with politeness," Suthep Thaugsuban said.
"You must obey your leaders when they say to move forward or to withdraw... if anything happens we must stand still and not fight or use weapons."
Ms Yingluck has vowed not to use force against protesters.
"We have chosen to be considered as a weak government by not using force," she said.
The mass street rallies are the biggest in three years, when political violence in Bangkok left dozens dead in a military crackdown.
The protests were triggered by an amnesty bill, since abandoned by the ruling party, that opponents feared would have allowed the return of fugitive former premier Mr Thaksin, whose overthrow by royalist generals in 2006 unleashed years of political turmoil.