Brian Cowen has stepped down as leader of Fianna Fail just five days after he won a vote of confidence from his parliamentary party. He will remain on as Taoiseach.
He announced the decision at a Dublin hotel shortly after 2pm following days of political turmoil in the wake of a disastrous attempt to reshuffle the Cabinet without the support of his coalition partners.
This lead to renewed criticism of his leadership from many Fianna Fail backbenchers ahead of a no-confidence motion in the Dublin government on Tuesday.
Only Tanaiste Mary Coughlan and party whip John Curran accompanied the Taoiseach to the media conference where he announced his resignation as leader of the party.
Cowen said the election should be fought on policies, and "not on personalities".
"I'm concerned that renewed internal criticism of Fianna Fail is deflecting attention from this important debate," Cowen said.
"Therefore, taking everything into account after discussing the matter with my family I have taken, on my own counsel, the decision to step down."
He said he had not consulted with party colleagues in making his decision.
The leadership of Fianna Fail would be decided in the next week, he added.
Just yesterday, Cowen had insisted he would lead Fianna Fail into the general election.
Speaking in Armagh where he attended a North-South Ministerial Council meeting, Cowen said he would stay on despite the bungled Cabinet reshuffle.
"There was controversy yesterday; yesterday is past," said Mr Cowen.
"I have the support of my party, as confirmed by democratic decision last Tuesday, to lead this party into this election and beyond. That is what I intend to do," said Mr Cowen.
It is not clear what caused Cowen's sudden change of heart, but there had been a deeply shocked reaction within his party at Thursday's humiliating u-turn, which forced the naming of March 11 as the date for a general election.
With just weeks to go before the polls and Fianna Fail in the low teens in terms of party support, a number of political commentators had suggested that the party faced annihilation.