Deputy First Minister Jim Wallace is to stand down as leader of the Scottish Liberal Democrats.
Jim Wallace believes it is the right time for him to move on
Mr Wallace will also leave the Scottish Parliament in 2007.
He said he had been considering his position for some time and wanted to make way for fresh blood in his party following the general election.
The Orkney politician said the Lib Dems' success in last week's poll meant he could hand over a confident party to his successor.
Mr Wallace, who is a QC, fought strongly for the Scottish Parliament to be set up and has held his ministerial position for the past six years.
The 50-year-old has been leader of the Lib Dems in Scotland for the past 13 years and played a prominent part in the general election campaign.
Speaking on BBC Scotland's Good Morning Scotland programme Mr Wallace said the time was right for him to go.
He said: "We had tremendous election results on Thursday night and I thought it was the right time to hand over to a successor.
"I think there's always a problem that party leaders have of not quite knowing when you've overstayed your welcome.
"I don't want to really encounter that problem.
"I'd rather go now and I can go knowing that I'm handing on a party that's in good form, it's confident and is clearly moving forward."
However, despite pleas from some of his close colleagues to carry on Mr Wallace said he would not change his mind.
"I've had a pretty exciting time" he explained. "But I always think it's probably better that you go when people are saying 'why are you going?' than 'when is he going?'.
"It's really something that's formulated over recent weeks and months and I wanted to wait until the general election was out of the way before making an announcement.
Out with the old... Mr Wallace with new MP Jo Swinson
"When you make that decision it's very difficult to go back on it. There's almost a credibility issue if you say you're going and then you come back - It's sort of political hokey cokey and that's not my style."
Mr Wallace said he had not thought about the future but that he had two years to think about his options.
He added: "I think there's still time for me to do something different. I don't know what it is but I will certainly miss much of the work I have been doing.
"There's a very special thing about being a member of parliament or a member of the Scottish Parliament you do have a relationship with the community which is very special, it's meant a lot to me, and clearly that's something which I'll miss."
Mr Wallace said he planned to stand down officially as leader at the end of June and from there it was up to the party to set the timetable for electing a new leader.
He said he thought a leadership battle would be "healthy" for the party.
A party spokesman said: "The party executive will have to decide on what timetable to set to elect a new leader but we would envisage an election in the next couple of months. The post will only be open to MSPs."
Nicol Stephen, the transport minister, Tavish Scott, the deputy minister for finance and public services, and backbencher Mike Rumbles are potential contenders.
Mr Rumbles spoke of his shock at the news and paid tribute to Mr Wallace's "terrific" achievements.
"I'm shocked actually, I wasn't expecting it," said Mr Rumbles. "He's done a terrific job and I understand why he's leaving on a high.
"I can see why Jim has decided this would be an appropriate time to go as it will give someone else time to make a impact before the next Holyrood polls.
He declined to discuss if he would be running for the leadership.
A spokesman for the Scottish Executive would make no comment on Mr Wallace's departure.
He said that as a result of the Partnership Agreement between Labour and the Liberal Democrats, the new leader of the Lib Dems would take over automatically as deputy first minister.