Labour veteran Ruairi Quinn has resigned his cabinet seat amid widespread speculation he would lose it in a looming reshuffle.
The former party leader announced his shock decision to stand down claiming it was time to make space for a new generation.
The outgoing education minister also announced he would give up the Dail seat he has held in Dublin South-East continuously since 1982 at the next election.
Mr Quinn accepted his resignation had come a bit sooner that he would have liked.
"I want to ensure that the new leader of my party, whoever that may be, has the opportunity to create their own team, on their own terms," he said.
"An opportunity to give a new generation a chance to lead; a chance to rebuild our party, and to finish the work of cementing a real recovery for the Irish people."
Joan Burton, the clear favourite to be the new Labour leader and thought to have been preparing to drop Mr Quinn from the party's ministerial team, paid a glowing tribute.
"Throughout his career, Ruairi has reflected the very best values of the Labour Party, and his legacy will be lasting," she said.
Mr Quinn's resignation will take effect when the cabinet reshuffle is announced.
The long-serving TD said he has voted in the Labour leadership but declined to say which way.
Mr Quinn was appointed Education Minister in 2011 when the coalition came to power. In his career he also served as finance minister from 1994-97 and has been widely praised for his stewardship of the economy in the years that preceded Ireland's boom.
The qualified architect was educated at Blackrock College.
He entered politics as a Dublin City councillor in 1974 before being elected to the Dail in 1977 only to lose his seat four years later and then return in 1982. He has also served in the Seanad and as a junior minister.
Major policies Mr Quinn has been involved in during his time in education were to divest the Catholic Church of some of its patronage of primary schools, reform the junior certificate exams and abolish grants for fee paying schools.
He was fiercely criticised for presiding over the re-introduction of college registration fees despite a Labour election promise not to.
Teachers also ran a collision course with him at times during his tenure, including this Easter when he was heckled and booed throughout a speech at one conference.
Mr Quinn is the third cabinet member to depart this year following the resignation of Labour leader Eamon Gilmore on the back of devastating election results and Alan Shatter after repeated controversies in the Department of Justice.
Sally Maguire, president of the Association of Secondary Teachers' Ireland, said it was unfortunate his time coincided with economic crisis.
"While the ASTI supported aspects of his junior cycle reform programme, it is regrettable that he failed to consult with the classroom practitioners on his proposals to replace the national State certified junior certificate examination," she said.
The Union of Students of Ireland said: "Students remember the pledge he made not to increase student fees before the last general election and rue his inability to keep to his promise."
Clive Byrne, director of the National Association of Principals and Deputy Principals, said Mr Quinn's motivation was "improving and reforming" education.