Ulster Unionist leader Sir Reg Empey has announced he intends to stand down in the autumn.
The new leader is expected to be in place ahead of its party conference in late October or early November.
Its 100-strong party executive met on Saturday after its electoral pact with the Conservatives failed to secure any Westminster seats.
It is believed party colleagues had urged him to stay on but Sir Reg said it was the right time for him to quit.
The UUP has also decided to hold a review of its relationships with other political parties, including the Tories and the DUP.
Vice chairman Terry Wright, who will oversee the review of its operations and recent failures, said they would take a "forensic" approach.
"What will come out of that will be clear messages about how we conduct ourselves in terms of future elections," he said.
BBC Northern Ireland political correspondent Martina Purdy said the review had "bought the party some time", adding that it was "significant that the review would be led by someone who still favours maintaining a relationship with the Conservative Party".
Sir Reg said he wanted to help the party develop a new strategy for next year's Northern Ireland Assembly elections before he leaves, with the selection of candidates taking place within weeks.
"I've made it clear to the executive today that as far as I'm personally concerned, I want to oversee this programme of work over the next few months," he said.
"When we come to the conference in the autumn, we will have a new slate of candidates and a new leader in place to take forward our party's campaign for the Assembly elections."
In the general election, Sir Reg chose to stand in the South Antrim constituency, which was thought to provide the party's best chance of making a gain from the Democratic Unionists.
However, he lost out to the DUP's sitting MP, William McCrea.
Sir Reg suggested on Saturday that DUP leader Peter Robinson should also step aside, having lost his East Belfast Westminster seat to the Alliance Party.
"I know it is the passion these days to brazen it out and ignore what is going on around you," he said.
"If you take my counterpart in the Democratic Unionist Party, there's maybe something both of us could do this autumn.
"Perhaps both of us could leave the stage and allow a fresh leadership to look at the situation anew, without any baggage.
"If I can put myself in this position having failed to win a seat I'd never held, perhaps somebody who held their seat but lost it might think about his position."
In less than 10 years, the party has gone from being the fourth largest party in the Commons to having no seats, the first time for more than a century it has had no representation at Westminster.
Sir Reg took a big risk to try to stop the decline, forging an electoral pact with David Cameron's Conservative Party.
However, the only UUP MP remaining after its disastrous 2005 general election performance, Lady Sylvia Hermon, left the party to stand as an independent in protest at its link-up with the Tories.
She retained her North Down seat with a convincing majority.
The Lagan Valley MLA Basil McCrea told the News Letter on Saturday that the electoral link-up with the Tories had not worked.
Mr McCrea was not at the meeting in Templepatrick as he is not a member of the UUP's executive.