"The Security Belt Forces, supported by loyal forces, established control over the presidential palace after four days of fighting with its guards", the source said.
He pointed out that the Saudi forces had retreated from the palace to the coalition's military base of al Barika, west of Aden.
Yemeni Deputy Foreign Minister Mohammed Hadrami has described the incident as a coup.
The reports come after at least 30 people were reportedly killed during clashes inside a camp of security forces of the presidential palace in Aden. The ongoing escalation of the conflict left dozens killed and injured in three days. Moreover, media outlets point to the possibility of a new front opening in Yemen's civil war.
Earlier this week, militants supporting the Southern Transitional Council engaged in clashes with their former allies, pro-government forces in the city of Aden. The Yemeni conflict between the government and the Houthi movement has been ongoing since 2015.