WATCH: Bill English speaks after John Key's shock resignation
John Key is resigning as Prime Minister of New Zealand.
Key made the announcement at his weekly press conference this afternoon.
Key, his voice shaking with emotion, said he told his Cabinet of his decision this morning.
"This is the hardest decision I've ever made and I don't know what I'll do next."
Key cited family reasons for leaving, saying the job had required great sacrifices "from those who are dearest to me".
His wife Bronagh had endured "many lonely nights" and his children Stephie and Max had been put under "extraordinary levels of intrusion".
Key met his wife Bronagh while attending Burnside High School. The pair married in 1984 and have two children, Stephie and Max.
"Bronagh has made a significant sacrifice during my time in politics, and now is the right time for me to take a step back in my career and spend more time at home."
The National Party caucus will hold a meeting on December 12 to decide the new party leader and Prime Minister.
Key said he would support whoever the caucus chose, but he endorsed Bill English as his replacement.
"Whoever the caucus votes for will have my unwavering support, but if Bill English puts his name forward then I will vote for him.
"For 10 years now Bill and I have worked closely as a team. I have witnessed first-hand his leadership style, his capacity for work, his grasp of the economy, his commitment to change and most of all his decency as a husband, as a father, a colleague and as a politician."
English has not ruled out standing for the top job.
Key said there is no way he could have serve out a full fourth term.
"I do not believe that if I was asked to commit to serving out a full fourth term I could look the public in the eye and say yes.
"And more than anything else in my time here, I have tried to be straight and true with New Zealanders.
"Making the decision to resign has not been easy, and I have no plans as to what comes next in my professional life."
Key said he was looking forward to enjoying a slightly quieter life in and spending time travelling with his spouse.
Key said he was "a commercial guy" and was likely to take up board positions, possibly with companies in Australia.
Unlike his predecessor Helen Clark, he "definitely" had no interest in international politics or a United Nations job.
Key said he could continue living in Auckland and had no plans to move overseas.
He said leaders seemed to stay too long and he felt this was the opportunity to go out on top.
He also said it was the right time to leave, as National were polling at nearly 50 per cent and the economy was growing.
"It leaves the Cabinet and caucus plenty of time to settle in with a new Prime Minister before heading into election year with a proud record of strong economic management," Key said.
"I am hugely confident that National can and will win the next election - just as I as am confident that the caucus has a number of people who would make a fine Prime Minister."
Asked what his legacy would be, Key said stabilising and growing New Zealand's economy after the global financial crisis and weathering crises such as the Canterbury earthquakes.
Key said his main regrets were failing to ratify the Trans Pacific Partnership, not getting the Kermadec Ocean Sanctuary opened, and not changing the national flag.
He had "given everything" to the job but had "nothing left in the tank".
Key said that he wanted to thank the Cabinet and Caucus for their loyalty and energy, and his staff for their hard work over these last eight years.
"I want to acknowledge and thank our support partners ACT, United Future and the Maori Party without whom the strong and stable government we have delivered would not have been possible.
"The Board, office holders and members of the National Party have my grateful thanks for everything they have done during my 10 years as their leader.
"I want to thank the people of the Helensville electorate who have returned me to Parliament every three years since 2002. It has been a great privilege to be their MP."
Key will remain MP for Helensville before stepping down closer to the next election.
Key cancelled his weekly scheduled interview with NewstalkZB at the NZME offices in Auckland this morning, and instead was interviewed over the phone from Wellington.
Labour leader Andrew Little has tweeted his well wishes to Key.
John Key has served New Zealand generously and with dedication. I wish him and his family the best for the future.— Andrew Little (@AndrewLittleMP) December 5, 2016
New Zealand First Leader Winston Peters said of the resignation: "The fact is that the economy is not in the healthy state that the Prime Minister has for so long claimed, and there are other issues which have caused this decision as well.
"The New Zealand public should have been informed of this a long time ago.
"Clearly the Prime Minister does not believe the superficial polls any longer.
"Contrary to certain perceptions the Prime Minister and his Finance Minister are unable to muddy the waters anymore."
The announcement caught former National leader Don Brash off guard.
"Well I'm stunned, it was certainly not expected by me or as far as I know by anybody else.
"Most people thought the Prime Minister was very keen to get a fourth term and to announce his resignation a full year before the next election is a very surprising development indeed," Brash said.
Brash said he had "high regard" for several members of the National caucus when asked who should be the new leader.
"One I have great respect for is Judith Collins who's got some very strong views and is a very strong person.
"I guess the reason for suggesting that is that I've been disappointed with the eight years of John Key government so far."
Key has led the National party since 2006.
Key built a career in foreign exchange in New Zealand before continued success in the industry overseas.
He entered Parliament in 2002 as National's representative for Helensville. In 2004 he was appointed Finance Spokesman for the party and succeeded Don Brash as party leader in 2006.
Key led his party to win the election in November 2008 and repeated the victory in 2011 and 2014.
Key has governed the country through the recession of the late-2000s, formed the Canterbury Earthquake Recovery Authority in response to the aftermath of the 2011 Christchurch Earthquake and created a much-protested policy for the partial privitisation of five state-owned enterprises.
Key has also withdrawn the NZ Defence Force from Afghanistan and worked to establish the TPP with the United States.
Kiwis express shock
Kiwis have taken to social media to express their shock at the news of Key's resignation.
Others are calling his resignation "fishy" and are seeking answers.
Councilor for Auckland's North Shore Richard Hills responded to the news on Facebook saying this year is all about "shock politics".