Palestinian Authority Prime Minister Salam Fayyad has submitted his resignation to President Mahmoud Abbas, he said in a statement.
The move comes ahead of power-sharing talks between Mr Abbas and his rivals Hamas, who control the Gaza Strip.
Mr Fayyad's resignation would pave the way for the formation of a national unity government, but he will not step down until that happens.
The move is being seen as conciliatory, as Hamas had demanded his departure.
The BBC's Tim Franks in Jerusalem says Mr Fayyad's resignation appears to be part of the careful choreography aimed at the creation of a new Palestinian government of national unity.
But he will not actually step down until that government is in place, and there is no guarantee of that, our correspondent says.
Delegations from Fatah and Hamas, as well as other Palestinian groups, have set up committees to look at forming a unity government and holding elections.
Talks have been going on in Cairo between the two sides.
January 2006 - Hamas wins Palestinian Authority legislative election
March 2006 - Hamas government sworn in. US and EU suspend ties
February-March 2007 - Fatah and Hamas agree to form coalition to end growing factional warfare
June 2007 - Hamas seizes control of Gaza from Fatah after continued fighting. Unity government dissolved, Israel tightens blockade of Gaza Strip
An early indication of progress will come at the end of this month with an initial report into the shape of a future unity government.
The new government would also co-ordinate the rebuilding of Gaza.
The divisions between Fatah and Hamas have been seen as one of the stumbling blocks to progress towards an Israeli-Palestinian peace deal.
Mr Fayyad - a former World Bank economist - says his resignation will take effect following the formation of the unity government by the end of March.
Analysts say the desire on the part of Palestinians to achieve reconciliation between their divided leaderships has grown more acute since Israel's three-week military offensive in Gaza, which ended on 18 January.