The former journalist cited the birth of her son, Finn, now ten months old, as a key reason for her decision, admitting in a letter to the Scottish party chairman Robert Forman the idea of spending time away from her family 'fills her with dread.'
Her decision comes as the Queen approved suspend Parliament for five weeks, but a spokesman for the Scottish Conservatives said the decision was "not connected to today's Brexit developments in any way".
She said: "Prime minister, get us a deal in the European union.
"And what I say to people that want to avoid no-deal is what I’ve just said – if the prime minister brings back a deal to the House of Commons, as I know he is trying to do, for God’s sake get behind it and this time, at the fourth time of asking, vote for it."
She added in her letter she will continue to serve as a Member of Scottish Parliament (MSP) for Edinburgh Central until 2021.
Ms Davidson described her eight-year tenure as leader - which included campaigning against leaving the union during the Scottish Independence Referendum - as the "privilege" of her life".
She added in her letter: "Inevitably, much has changed over the years of my leadership - both personally and in the wider political context.
"While I have not hidden the conflict I have felt over Brexit, I have attempted to chart a course for our party which recognises and respects the referendum result, while seeking to maximise opportunities and mitigate risks for key Scottish businesses and sectors."
"The biggest change, of course, has been starting a family. I cannot thank you, Jackson Carlaw and the wider party enough for the generosity and support you have all shown to Jen and me following the birth of baby Finn.
"It made my return to work in April as smooth as I could have hoped and I believe the flexibility shown by colleagues has allowed me these last months to continue operating successfully in my role as leader.
"However, as I look to the future, I see the Scottish Election due in 2021 and a credible threat from our opponents to force a general election before then. Having led our party through seven national elections and two referenda, I know the efforts, hours and travel required to fight such campaigns successfully."
First Minister of Scotland Nicola Sturgeon wished the departing leader well and said the politics of her decision can be discussed at a later date.
She said: "I wish Ruth well for the future.
"I know well the toll political leadership can take on family life and no-one will grudge her more time with her young son.
"There will be opportunity later to discuss the politics of her decision - but for now, I'll simply send my best wishes."
Former prime minister Theresa May said she is "sorry" to see Ms Davidson step down and thanked her for her service as leader over eight years.
MP John Lamont said he was 'saddened' by the news: