Mrs Foster said she will stand down as party leader on May 28 and as First Minister at the end of June.
The announcement comes 24 hours after an sizeable internal heave against her by DUP politicians unhappy with her leadership.
The 50-year-old Fermanagh and South Tyrone representative indicated her resignation will mark the end of her political career, as she said she was preparing to “depart the political stage”.
“A short time ago I called the Party Chairman (Lord Morrow) to inform him that I intend to step down as leader of the Democratic Unionist Party on the 28th of May and as First Minister of Northern Ireland at the end of June,” she said.
“It is important to give space over the next few weeks for the Party Officers to make arrangements for the election of a new leader. When elected I will work with the new leader on transition arrangements.
“As First Minister it is important that I complete work on a number of important issues for Northern Ireland alongside other Executive colleagues.
“Northern Ireland and its people have been heavily impacted by the Covid-19 pandemic and there remains more work to be done to steer us thorough the pandemic and to lessen its impact on the lives of everyone.”
End of five-year tenure at helm of the DUP
The end of Mrs Foster’s five-year tenure at helm of the DUP had been widely anticipated after it emerged that a significant number of her colleagues had signed a letter of no confidence circulated among party MLAs, MPs and peers.
There has been growing unease among DUP members about Mrs Foster and the wider party leadership in recent months.
The primary source of concern is the handling of the Brexit process. The DUP is facing anger from the wider loyalist and unionist community for the introduction of an Irish Sea border.
Critics have accused Mrs Foster of failing to use the party’s influence at Westminster – particularly during its confidence and supply deal with the Conservatives – to secure a Brexit deal that saw Northern Ireland leave the EU on the same terms as the rest of the UK.
She has also been accused of not being vociferous enough in opposition to the contentious Protocol, which governs the new Brexit trading barriers between NI and GB, ahead of its introduction at the start of 2021.
Poor recent polling numbers have exacerbated the discontent within the party faithful, who are mindful of next May’s looming Assembly election.
Aside from the Irish Sea border, Mrs Foster’s decision to abstain in a vote calling for a ban on gay conversion therapy last week appears to have further agitated sections of the party’s fundamentalist grassroots.
The majority of her party Assembly colleagues voted against the motion, having failed to amend it to include reference to religious protections.
Mrs Foster was among only five party members, including fellow Stormont Executive ministers Peter Weir and Diane Dodds, who abstained.
That episode points to tensions between Mrs Foster, a member of the Church of Ireland and former Ulster Unionist, and the more traditional Free Presbyterian wing of the DUP, who perceive her as potentially too moderate on some social issues.
‘Privilege of my life to serve the people of Northern Ireland’
Announcing her resignation, Mrs Foster said: “It has been the privilege of my life to serve the people of Northern Ireland as their First Minister and to represent my home constituency of Fermanagh/South Tyrone. I first entered the Assembly in 2003 and undoubtedly the journey of the last eighteen years has been memorable. There are many people who have helped and supported me throughout that period and I will always been grateful for the kindness and support shown to me by them.
“Whilst there have been many difficult and testing times for the Executive it remains my firm view that Northern Ireland has been better served having local Ministers at this time. It is unthinkable that we could have faced into the Coronavirus pandemic without our own devolved Ministers in place and no Ministerial direction for Departments.
“As I prepare to depart the political stage it is my view that if Northern Ireland is to prosper then it will only do so built on the foundations of successful and durable devolution. That will require continued hard work and real determination and courage on all sides.”