Mike Nesbitt has said he intends for the Ulster Unionist Party to withdraw from the Executive and form an opposition.
Speaking in Stormont's Great Hall, he said: "In 1998, the Ulster Unionist Party stretched itself very close to breaking point to secure the return of devolution, because it was the right thing to do.
"A founding principle of that agreement was the opportunity to build mutual trust between unionism, nationalism and republicanism.
"Seventeen years on, we are told the IRA still exists, and that it has a command structure, at a senior level.
"We are also told members of the IRA have committed a murder on the streets of our capital city, working with another criminal gang, Action Against Drugs.
"And in response, Sinn Féin trot out their single transferrable speech of denial.
"That speech is threadbare. It has put a hole in the fabric of the agreement.
"That hole needs mended.
"The single transferrable speech of denial totally lacks credibility.
"It has shattered trust".
He continued: "The Ulster Unionist Party remains wedded to our vision of a Northern Ireland that is totally peaceful and where everyone prospers - unionists, nationalists and republicans equally.
"Where we offer each other mutual respect for our traditions.
"Where we deliver the much heralded oeace dividend, which would bring that prosperity to all our people, not least the vulnerable.
"Where devolved government delivers better government than direct rule.
"Those were the key outcomes we envisaged in 1998.
"Since 2007, the DUP and Sinn Féin have been leading our government. That’s over eight years. We need wait no longer for further proof of their inability to deliver those goals.
"In sadness more than anger I recognise they cannot deliver positive outcomes for our people.
"We hear what people are saying. They need and deserve and yearn for a party that is willing to stretch itself today – stretch beyond its own self-interests to what’s right for the people of Northern Ireland – all of them.
"The Ulster Unionist Party is ready to stretch itself again."
Mr Nesbitt added: "I have just chaired a meeting of our MLA Group, also attended by our MEP, our MPs, senior officers of our councillors’ association and our party chairman representing our party officers.
"I gave them my analysis of where we are.
"I gave them my recommendation, which they accepted unanimously.
"The next step is to call a meeting of our own executive, to ask them to endorse our collective decision.
"That decision is to withdraw from the Northern Ireland Executive, to form an opposition and offer people an alternative, as is the way in any proper democracy.
"We are in a bad place, but this can be fixed.
"But the IRA need to go away and stop terrorising their own communities.
"So do the UDA, and UVF and Red Hand Commando – and the rest.
"And I wouldn’t argue if they took down their paramilitary flags on the way out.
"Our Vision remains that of a Northern Ireland that is totally peaceful and where everyone prospers – republicans, nationalists and unionists equally."