Mr Griffin says in 2013 it will be time for a "younger person"
Nick Griffin is to step down as leader of the British National Party by the end of 2013, a party statement says.
According to the BNP website, he said by then he would have been party leader for 15 years which was "long enough".
He wanted to "make way for a younger person" and focus on getting re-elected to the European Parliament in 2014.
The party also said it had received a "bloody nose" in the local elections - it lost all 12 of its seats on east London's Barking and Dagenham council.
Mr Griffin said his decision was timed to allow the last "building blocks" of the BNP's administrative and political machine to be put in place.
"This is going to take at least 18 months to implement and after that I intend to hand the party over to someone who will be able to drive support up to where it can be a serious contender for power.
"It will be time to make way for a younger person who does not have any baggage which can be used against the party," he said.
Of the BNP's 2014 European election hopes, Mr Griffin said he was sure the party could retain its two seats and add "several more" to the tally.
"I then intend to help the other European nationalist parties to achieve the level of sophistication which the BNP has been able to build up, because a victory for any one of these parties is a victory to all of us," he said.
The party said it also wanted to "revolutionise" the way it fought elections.
The BNP's loss in Barking in the local elections mirrored its defeat in the parliamentary elections where Labour minister Margaret Hodge saw off a challenge by Mr Griffin, winning by a majority of more than 16,000.