Ferenc Gyurcsany is to notify parliament of his decision on Monday
Hungarian Prime Minister Ferenc Gyurcsany says he will stand down, as his government's popularity plummets amid the global financial crisis.
The Socialist leader, in power since 2004, told his party congress that he considered himself a hindrance to further economic and social reforms.
He is to officially notify parliament of his decision on Monday.
Badly hit by the global credit crisis, Hungary received a $25.1bn (£17bn) IMF-led loan last October.
"I hear that I am the obstacle to the co-operation required for changes, for a stable governing majority and the responsible behaviour of the opposition," he was quoted as saying on Saturday by Reuters news agency.
"I hope it is this way, that it is only me that is the obstacle, because if so, then I am eliminating this obstacle now.
"I propose that we form a new government under a new prime minister."
Mr Gyurcsany did not name any possible successor.
He won re-election in 2006, becoming the first Hungarian premier since the end of communism in 1989 to hold on to power.
But week of riots erupted when he revealed on a leaked tape in September 2006 that he had lied about the nation's poor finances to win re-election.
Correspondents say that although Mr Gyurcsany had reduced the budget deficit, he had failed to win public support for wider economic reforms.
His popularity fell to record lows due to tax hikes and spending cuts implemented in the last three years, say analysts.