Bob Brown has resigned as leader of the Australian Greens. He will also resign from the Senate.
Senator Brown made the shock announcement to his Greens Party colleagues this morning.
Senator Brown told reporters this afternoon that he was "very sad to go but very happy to make way for the depth of talent that there is in the [party]", pointing out that he was 67 years old.
Senator Brown said the agreement signed to form minority government with Labor would stand.
He said that "he will be a Green until the day I die, if not for a long time after that".
"I'm well aware of the size of this decision," he said, noting that he had been discussing his decision since returning from the Greens' global conference in Africa this month.
Greens deputy leader Christine Milne has been elected as the new leader. There will be a further Greens party meeting this afternoon to vote for a deputy leader to replace Senator Milne.
It is understood there are three candidates for the vacant deputy leadership position.
Senators Sarah Hanson Young and Scott Ludlam and MP Adam Bandt have each nominated for the position.
It is understood Senator Hanson-Young - who unsuccessfully challneged Senator Milne last year for the deputy leader position - does not have the necessary party room support and the vote will be a close result between Senator Ludlam and Mr Bandt.
Senator Milne today paid tribute to Senator Brown's "extraordinary leadership", saying she would carry through his "values of looking after our country and our people, now and into the future".
"Under Bob's wise leadership, the Greens have grown into the undisputed third force in Australian politics, with our vision, policies and action towards a healthier, cleverer, cleaner future embraced by 1.7 million Australians," she said.
"Under my leadership, we will work tirelessly towards making Australia a great place to live and work.
"For 25 years, Bob has been an inspiration to millions of Australians and a great force for good in our country. But he's also been a colleague, a mentor and friend to me. I thank him from the bottom of my heart for everything he has done and look forward to the next stage in his career."
Senator Milne said it was a privilege to have been elected but conceded it was a "daunting task". She said protection of the environment and natural resources remained the Greens' biggest priorities.
Senator Milne said she had "plenty of experience" in minority governments and the position of holding the balance of power. She said she would embark on a "listening tour" of regional and rural Australia as the Greens had "misunderstood" the needs of farmers and those living in the bush "for some time".
Senator Brown has been a senator for 16 years. He has led the Australian Greens since the party formed in 1992, seeing the party's vote grow to double figures.
When asked about his disappointments in federal politics, Senator Brown offered that he didn't get to be Minister for Westerly Winds.
"I haven't become minister for anything or secretary for anything," he said.
He has called the Governor-General, the Prime Minister, the Opposition Leader and the leader of the Tasmanian Greens to tell them of his resignation.
"I look forward to fresh green pursuits including writing, photography, music, occasional talks, bushwalking, and getting out with [partner] Paul [Thomas] to see Miranda Gibson who has been perched for 120 days 60 metres high, in defence of a giant tree facing destruction in central Tasmania," Senator Brown said in an earlier statement.
Senator Brown - who trained as a doctor - first gained political prominence as the head of the Tasmanian Wilderness Society during the campaign to save the Franklin Dam. In 1983, he became a member of the Tasmanian Parliament.
He was the first openly gay member of Federal Parliament, and the first openly gay leader of an Australian political party.
His political career has been marked by controversial episodes and a knack of flying in the face of protocol.
In October 2003, Senator Brown was suspended from the Parliament for interjecting during an address by the visiting US President George W. Bush.
Prime Minister Julia Gillard this afternoon thanked the Tasmanian for his contribution to state and federal politics.
"Bob's career has been driven by a passion for our environment, having famously led a protest against the construction of the Franklin Dam," she said.
"It was this passion that saw him lead his party through historic negotiations with the government and independents Tony Windsor, Rob Oakeshott and Andrew Wilkie, to ensure the passage of our Clean Energy Future Package.
"Bob has also been an active voice on the rights of same sex couples, having bravely used his own experiences to campaign for change."
Senator Milne - an avid gardener - also has a long history of fighting for environmental causes. She participated in the Franklin Dam blockade in 1983 and was elected to the Tasmanian Parliament in 1989.
When Senator Brown stood down from state politics in 1993, Senator Milne succeeded him as leader of the Tasmanian Greens.
Senator Milne then worked as an adviser to Senator Brown before being elected to the federal Senate in 2004.