Theresa May has said she will quit as Conservative leader on 7 June, paving the way for a contest to decide a new prime minister.
In an emotional statement, she said she had done her best to deliver Brexit and it was a matter of “deep regret” that she had been unable to do so.
Being prime minister had been the “honour of my life”, she said.
Mrs May said she would continue to serve as PM while a Conservative leadership contest takes place.
It means she will still be prime minister when US President Donald Trump makes his state visit to the UK at the start of June.
Mrs May announced she would step down as Tory leader on 7 June and had agreed with the chairman of Tory backbenchers that a leadership contest should begin the following week.
Boris Johnson, Esther McVey and Rory Stewart have said they intend to run for the party leadership, while more than a dozen others are believed to be seriously considering entering the contest.
The prime minister has faced a backlash from her MPs against her latest Brexit plan, which included concessions aimed at attracting cross-party support.
Andrea Leadsom quit as Commons leader on Wednesday saying she no longer believed the government’s approach would “deliver on the referendum result”.
Mrs May met Home Secretary Sajid Javid and Foreign Secretary Jeremy Hunt at Downing Street on Thursday where they are understood to have expressed their concerns about her proposed withdrawal bill.
In her statement on Friday, she said she had done “everything I can” to convince MPs to support the withdrawal deal she had negotiated with the European Union but it was now in the “best interests of the country for a new prime minister to lead that effort”.
She added that, in order to deliver Brexit, her successor would have to build agreement in Parliament.
“Such a consensus can only be reached if those on all sides of the debate are willing to compromise,” she said.
Mrs May’s voice shook as she ended her speech saying: “I will shortly leave the job that it has been the honour of my life to hold.
“The second female prime minister, but certainly not the last.
“I do so with no ill will, but with enormous and enduring gratitude to have had the opportunity to serve the country I love.”
In a statement, the Conservative Party said the likely timetable for the party leadership contest was that nominations would close during the week beginning 10 June, with the process of whittling down candidates to the final two to conclude by the end of the month.
Those names would then be put to a vote of party members before the end of July.
Labour Leader Jeremy Corbyn said she had been “right to resign” and that the Conservative Party was now “disintegrating”.
Scotland’s First Minister Nicola Sturgeon wished her well despite “profound disagreements”, including on Brexit, but added: “The prospect of an even more hardline Brexiteer now becoming PM and threatening a no-deal exit is deeply concerning.
“Added to the experience of the past three years, this makes it all the more important that Scotland is given the choice of becoming an independent country.”
Democratic Unionist Party Leader Arlene Foster, whose party supported Mrs May’s government in power after the Conservatives lost their majority in the 2017 election, praised Mrs May’s “dutiful approach on national issues”.
Lib Dem leader Sir Vince Cable said it was Mrs May’s compromises with the right-wing of her party were to blame, adding: “The best and only option remains to take Brexit back to the people. I believe the public would now choose to stop Brexit.”
But Brexit Party Leader Nigel Farage said two Conservative leaders whose “instincts were pro-EU” had now gone and the party either “learns that lesson, or it dies”.
Following her emotional coda to her statement on the steps of Downing Street, expect the tributes to Theresa May to flood in, even from those pushing her from office.
Her resilience. Her determination. Her sense of duty.
Ultimately, though, her premiership fell apart in an attempt to bring people together.
Her Brexit deal stymied by too many of her own MPs, she tried to reach out across the Commons.
But in proposing a vote on a referendum – even though she expected MPs to reject another public vote – she over-reached.
Some members of her cabinet who are manoeuvring to replace her withdrew their consent from her latest plan, effectively throwing out its compromises and her leadership.
She pointed today to some of her achievements in office but frankly she has had to announce the timetable for her departure before securing the legacy she desired – leaving the EU with a deal.
In a hung parliament, the question now is whether the next Conservative leader will be able to succeed where she failed.
Or whether something more radical will be required: no deal, a new referendum, or a general election.