David Cameron will resign as Prime Minister of the United Kingdom by October after the country voted to leave the European Union.
Mr Cameron said he will "steady the ship" in the coming weeks and months but believes the country needs fresh leadership as the UK enters a new era.
He did not give a specific timeline, but said a new Conservative Prime Minister should be in place by the party conference in October.
His comments suggest that negotiations on the UK's withdrawal from the European Union will begin once a new Prime Minister is in place.
The news also means that Conservative party members, of which there are just 150,000, will choose the next Prime Minister. There was no mention of another general election to for the whole country to elect a new Prime Minister. When Gordon Brown replaced Tony Blair in 2007, he was widely criticised for not calling an election.
Nigel Farage has already called for a 'Brexit' government to be in place to lead the UK through its withdrawal, suggesting a pro-Brexit Conservative should be Prime Minister.
Mr Cameron's decision comes after more than 17 million people voted in favour of leaving the EU, with 52% of the vote.
Mike Cherry, national chairman at the Federation of Small Businesses (FSB), said: “While we understand David Cameron’s position, his decision to step down now leaves a period of uncertainty. The single most important issue right now is political and economic stability and we call on politicians of all parties to work together to achieve this.”