Jose Manuel Durao Barroso has resigned as Portuguese prime minister to clear the way for his probable appointment as European Commission president.
Barroso led Portugal's coalition government
President Jorge Sampaio accepted his resignation after a one-hour meeting, Mr Durao Barroso said.
"I take this step in full confidence in our democratic institutions," he told reporters in Lisbon.
European leaders picked Mr Durao Barroso as the next EC president at a special summit in Brussels last week.
His appointment as successor to Romano Prodi still has to be confirmed in a vote at the European Parliament later this month.
Although he can rely on the support of the centre-right EPP group, the next two largest groups, the Socialists and the Liberals, have not yet given their outright support.
Mr Sampaio met former political leaders in recent days to discuss whether to call early elections or name a new government.
The next polls are not due till 2006.
Mr Sampaio is due to hold talks with the two major parties, the Socialist Party and the Social Democrat party, on Wednesday.
Lisbon Mayor Pedro Santana Lopes, newly elected leader of the ruling Social Democrats, is seen as the party's front-runner to be nominated prime minister.
But the opposition Socialist Party, which is leading in opinion polls, has called for early elections.