Mike Nesbitt quit as Ulster Unionist leader after the party suffered an election meltdown - one of a series of big-name casualties on a day of high drama.
Mr Nesbitt said it would be "the height of hypocrisy" if he were to stay on following a disastrous showing for the UUP.
He announced his resignation after the party suffered a series of losses in an election he predicted would deliver major gains.
Former deputy leader Danny Kennedy lost in Newry and Armagh, with Jo-Anne Dobson, Philip Smith, Sandra Overend, Harold McKee and Jenny Palmer also out.
Away from Mr Nesbitt's departure, the story of the election was a surge in support for Sinn Fein.
The final tally of seats will not be known until today but the party is set to close the gap on the DUP.
It was possible last night that both parties could finish on 28 seats, but the DUP would select the First Minister because they had marginally more votes - albeit at 0.2% it was the slimmest of leads.
Aside from the UUP meltdown, several major figures lost their seats on a day of shocks, including former Executive Ministers Alex Attwood, Nelson McCausland and Jonathan Bell.
DUP chairman Lord Morrow missed out in Fermanagh-South Tyrone.
With both the DUP and Sinn Fein emerging as the dominant parties, Stormont seemed to be facing stalemate for some time to come.
And there is confusion over when the Assembly might hold its first meeting for the 90 MLAs to register, although it appeared that it will not be next week.
DUP leader Arlene Foster said it had been "a very good day for Sinn Fein".
Michelle O'Neill's performance as new Sinn Fein leader in Northern Ireland was hailed by Gerry Adams - the man Mrs Foster had put at the centre of her party's campaign.
He said it was time for a "step change". Mr Adams warned it was time for "a new beginning to how we do our business."
But the main focus of the day was on the UUP and Mr Nesbitt, who quit as leader after five years.
He said he had to take "full responsibility" for his party's results having spent three months lecturing Mrs Foster about how she should take responsibility for her actions over the Renewable Heat Incentive (RHI) Scheme.
He added: "My only regret is that the results seem to indicate that this society is now more polarised than ever, rather than more united in a shared future, which was my aspiration."
A despondent Mr Nesbitt said the electorate appeared to have rejected his hope for a post-sectarian vote.
"We will get there," he said. "Some day Northern Ireland will vote as a normal democracy. We will vote in a post-sectarian election but it's now clear it will not happen during the duration of my political career."
Mr Nesbitt is to stay on as leader until a successor is appointed and will remain a Strangford MLA, at least until the party's annual general meeting, which is due to take place in around two weeks.
Sinn Fein, meanwhile, threw down the gauntlet to the DUP.
With an initial period of three weeks before legislation says an Executive must be formed, Ms O'Neill said: "We have to have fundamental change from the DUP.
"There is a hard road in front of us in the next three weeks but Sinn Fein is coming at it trying to find a way forward."
Mrs Foster said: "(Sinn Fein) have to respect the mandate given to me not just here but across Northern Ireland because they are always very keen to point out that they want their mandate respected."
Mr Adams said the vote was "also a re-assertion of our position on Brexit, that this part of Ireland should have a special designated status" and "a vote for Irish unity".
He added: "As Ian Paisley famously told Martin McGuinness, we don't need Englishmen to govern us."
After her first election as Alliance leader, Naomi Long said she hoped some of the more inflammatory statements made during the last few weeks could be "put to one side" to allow progress to be made.