"Last year, I indicated that I would not lead the FG Party into the next General Election. I have decided to implement this decision today," Kenny said in a written statement posted on his Twitter account.
"Therefore, I will retire as leader of Fine Gael effective from midnight tonight 17th May 2017," he said.
Kenny will remain as a party leader in acting capacity until his successor is elected. The new leader is expected be announced on June 2.
In his announcement, Kenny said he would allow the new leader "brief but appropriate period" to engage with other political parties before standing aside.
The 66-year old leader has been Fine Gael's chairman since 2002 and the prime minister since 2011.
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