Key said his National Party caucus would meet Dec. 12 to decide on a new party leader and prime minister, and that he expected to formally submit his resignation to the Governor-General that same day.
He said he would back his deputy Bill English to take over. English said he would likely decide in the next day or two if he would seek the role.
The New Zealand dollar fell by nearly 1 percent on the news and was trading at $0.71 U.S.
Australian Prime Minister Malcolm Turnbull said he’d sent Key a short message: “Say it ain’t so, bro.”
“John Key is one of the most outstanding national leaders in the world today,” Turnbull told reporters. “He has done an extraordinary job for New Zealand. He is somebody that all of us, right around the world, leaders in countries large and small, draw inspiration from.”
New Zealand’s opposition leader Andrew Little said the decision had taken everybody by surprise.
“He is entitled to be recognized for what he has done for New Zealand,” Little said. “He’s been there through some pretty difficult times.”
Key was a successful currency trader before turning to politics. He was elected to the nation’s parliament in 2002 and enjoyed a quick rise, becoming leader of his center-right opposition party in 2006. He won his first general election and became prime minister in 2008.
He won subsequent elections in 2011 and 2014 and retained unusually high popularity ratings. His party was a clear favorite to win the most votes at next year’s election, at least until his announcement on Monday.
