Nepalese Prime Minister Madhav Kumar Nepal has announced his resignation in a televised speech.
He said that he wanted to bring an end to political deadlock in the country and move the peace process forward.
Mr Nepal has been under pressure to resign for some months by the Maoists. They say that as the largest party it is their right to determine who is PM.
Mr Nepal was appointed little more than a year ago to head a 22-party coalition that succeeded the Maoist government.
The BBC's Joanna Jolly in Kathmandu says that it is not yet clear who will succeed him.
His resignation comes a month after his governing coalition and the opposition Maoist party agreed to extend the deadline for the country to write a new democratic constitution by one year.
'Confusion and indecision'
"I have decided to resign from the post of prime minister so that the peace process can be completed, a new constitution drafted and the current political deadlock resolved," he said.
"I had frequently urged the political parties including the Maoists to find an appropriate way out of the present deadlock and forge a consensus. But no agreement has reached so far."
Mr Nepal said it "would be inappropriate to further prolong the situation of confusion and indecision".
He became prime minister in May 2009 after the previous government - led by the Maoists - resigned following a row with the president over the firing of the army chief.
The prime minister said he had hoped to negotiate with the Maoist party to move forward with the peace process, but they had refused to fulfil their commitments to the deal, which include integrating their former fighters into the national army and disbanding their paramilitary wing.