Sir Reg Empey is to stand down as Ulster Unionist leader in the autumn.
Mr Empey announced the move at a meeting of the UUP's executive today..
He spent the last week pondering his future after his electoral link-up with the Conservative Party failed to win any Westminster seats.
The former businessman was narrowly defeated in South Antrim by Democratic Unionist William McCrea.
A UUP source said the party needed a period of "reflection" after the campaign.
However Strangford MLA David McNarry has already declared the leader "finished" after the difficult election.
The party executive also discussed its pact with the Conservatives. Prime Minister David Cameron is predicted to arrive in Northern Ireland next week.
Critics of the party's performance have openly highlighted the lack of preparation time for their new candidates ahead of the poll; advocates insist it offers a real opportunity for "normal" politics to take over from a sectarian head count.
Their former MP, Lady Sylvia Hermon, won a landslide in North Down after standing as an independent and declaring that she was not a Conservative. Liberals like Basil McCrea want to appeal to voters who would traditionally vote Alliance and hope to turn away from the DUP and Conservatives.
Others in the party are said to favour unionist unity but are wary of being overshadowed by the larger DUP.
Some say the unity option has some urgency because of concerns that Martin McGuinness could take the first minister's job if Sinn Fein emerged as the largest party in an assembly election next year.
Potentially the DUP could still win the lion's share of seats next year without realignment but this is not guaranteed.