Video report by ITV News Political Editor Robert Peston
There will be a new UK prime minister by the end of July after a tearful Theresa May committed to passing on the reigns following a troublesome premiership.
The PM was finally forced to set a date for her inevitable departure from Number 10 and she revealed her turbulent tenure will end on June 7.
Several prominent Tory MPs have already thrown their hat into the ring to become next party leader and the contest to replace Mrs May is likely to be brutal.
Big names including favourite Boris Johnson and outsider Jeremy Hunt have already confirmed they intend to run but the final list of contenders is likely to be lengthy.
In an emotional Downing Street statement, Mrs May said it was in the "best interests of the country" for a new prime minister to lead efforts to deliver Brexit.
She struggled to fight back the tears as she said it had been "the honour of my life" to serve "the country that I love".
The Conservative leader said she had "done my best" to deliver a Brexit deal as she outlined her resignation timetable.
She said: "I have striven to make the UK a country that works not just for a privileged few but for everyone and to honour the result of the EU referendum."
As her speech drew to a close, the Conservative leader appeared to break down in tears, with her voice visibly cracking.
She concluded: "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."
Despite resigning as leader of the Conservatives, Mrs May will not resign as a Member of Parliament, her constituency chairman confirmed.
"The main concern for us as her association is that she's not going to resign her seat. She will carry on as a Member of Parliament, which is welcomed by us," Mr Kellaway told the Press Association.
"As the Prime Minister, she could go to the House of Lords if she wants to go that route and carry on, or she could stay a member of Parliament," he said.
Almost three years after the UK voted to leave the European Union, Mrs May said: "It is, and will always remain, a matter of deep regret to me that I have not been able to deliver Brexit.
"It will be for my successor to seek a way forward that honours the result of the referendum."
Mrs May warned the next Conservative leader that adopting a hardline approach to Brexit talks would only damage their chances of securing a Brexit deal.
As Brexiters like Boris Johnson, Dominic Raab and others remain among the bookmakers' favourites, Mrs May warned her successor: "Such a consensus can only be reached if those on all sides of the debate are willing to compromise."
Who has thrown their hat in the ring to take over:
Whoever takes over the reins from Mrs May faces the task of trying to secure a Brexit deal without a parliamentary majority - meaning they will have to rely on support from either the DUP, Labour or other parties.
Her resignation today marks the starting gun for Conservative MPs wanting to run for leader to set out their vision for the country in a bid to earn the support of their fellow parliamentarians and party members.
Jeremy Hunt appeared to be the first leadership candidate to throw his hat into the ring on Friday, telling his local newspaper the Farnham Herald: "I'll make the announcement on my own candidacy at the appropriate time."
Bookmakers' favourite Boris Johnson also did not rule out a tilt at the top job.
The former Mayor of London refused to rule out a tilt at the leadership at a convention in Switzerland today, telling an audience: "Believe me, you will hear more about that than you necessarily want to hear in the next few days."
Other prominent Brexiteers like Andrea Leadsom, Dominic Raab and Esther McVey are also in the mix.
Among the prominent Remain MPs who has already formally announced his leadership intentions is Rory Stewart, who outlined his hopes for the country in an interview with the Daily Mail.
Amber Rudd and Sajid Javid are just two other prominent Remainers who could announce their own leadership ambitions.
Meanwhile, ITV News Political Editor Robert Peston tweeted that Sir Graham Brady, the chairman of the 1922 Committee, stood down as head of the group as he weighs up whether to run.
'Sad but necessary day': Politicians critique May's tenure
Jeremy Corbyn said Mrs May was "right to resign" and that she has only just "accepted what the country's known for months: she can't govern, and nor can her divided and disintegrating party".
He added: "Whoever becomes the new Tory leader must let the people decide our country’s future, through an immediate General Election."
Members of Mrs May's Cabinet were quick to issue statements about the incumbent Prime Minister, praising her bravery and resolve to try and break through the Brexit impasse.
Michael Gove, who previously said he would not resign from Mrs May's government, paid tribute to the PM.
He said he found the speech "moving", adding "all of us should spend today reflecting on everything she has done and giving her the gratitude she deserves".
He refused to outline if he would launch another bid to become Tory leader after he failed during in 2016.
Andrea Leadsom, who resigned from the Cabinet on Thursday following Theresa May's latest attempt to get her Withdrawal Agreement Bill through Parliament, tweeted: "A very dignified speech by @theresa--may. An illustration of her total commitment to country and duty. She did her utmost, and I wish her all the very best."
Work and Pensions Secretary Amber Rudd tweeted: "The Prime Minister has shown great courage. She is a public servant who did all she could to bring Brexit to a resolution.
"Her sense of duty is something everyone should admire and aspire to."
Across the pond president Donald Trump echoed her sentiment by offering his condolences for "strong" Mrs May.
He told reporters: "I feel badly for Theresa, I like her very much. She's a good woman, she worked very hard, she's very strong."
Former prime minister David Cameron said he was "desperately sorry for Theresa".
Speaking from outside his Oxfordshire home, he said Mrs May worked "incredibly hard" as a "dedicated public servant".
Mr Cameron believes Mrs May's premiership will be remembered for its strong economic record, high employment but also the "huge difficulties" she inherited with steering the country through it's exit from the European Union.
A number of backbenchers, many of whom did not support Mrs May's Brexit proposals, also paid tribute to her service.
Brexiteer and deputy chairman of the European Research Group Steve Baker said it was a "sad but necessary day".
Former Foreign Secretary Boris Johnson also thanked her and said it was now the time to deliver on Brexit.
"Thank you for your stoical service to our country and the Conservative Party. It is now time to follow her urgings: to come together and deliver Brexit."
Opposition leaders paid tribute to Mrs May, but urged for Brexit to be taken in a different direction after multiple Brexit deals had been rejected by parliament.
Despite differing views on Brexit, and in particular the Northern Ireland backstop, DUP leader Arlene Foster praised Mrs May's "sense of duty".
"It's no secret we had our differences, particularly over Brexit," Mrs Foster said.
"But I have never doubted Theresa May's sincerity or indeed her sense of duty to do what she felt was right for the nation.
"She was quite selfless in all of that and I think it's right that we acknowledge that today."