THE leadership of Premier Mike Rann is in turmoil after he has been formally told his reign is over.

The much anticipated move on Mr Rann was made late Friday when he was given an ultimatum by two senior members of the Right faction - stand down or be removed.

In a meeting in his State Administration Centre office the pair, Right faction powerbroker Peter Malinauskas and Treasurer Jack Snelling, told Mr Rann the factions had agreed on a new leadership ticket that would see Education Minister Jay Weatherill installed as Premier and existing Deputy Premier John Rau continue in the role.

Mr Rann was told the factions wanted the new leadership team in place prior to the start of the Spring parliamentary session on September 13 and that he must stand down during the winter break.

The factional deal means that if Mr Rann opts not to stand aside and forces a leadership ballot, he would lose if members vote along factional lines.

Senior party sources today said Mr Rann reacted in "an extremely hostile manner" when given the ultimatum and told the pair he would not stand down.

"Needless to say, Mike was not impresssed," one senior source said.

"He was angry, extremely angry and made all sorts of threats.

"He may of been a little calmer this morning, but I am not sure by how much.

"It is definitely game on now, there is no turning back from this action. Either Mike steps down gracefully or he will force the issue to a ballot which he has little chance of winning now the deal has finally been brokered."

Mr Rann was also angry he had been confronted with the ultimatum on the eve of a week-long trip to India. He flew out of Adelaide at 9am.

Sources said the Left and Right factions had finally decided on a Weatherill/Rau leadership ticket after several months of negotiations.