Martin Schulz announced Wednesday he would step down as leader of Germany's centre-left Social Democrats and that he intended to serve as foreign minister in the next coalition government led by Chancellor Angela Merkel.
"I have decided to enter the government as foreign minister," he told reporters hours after clinching a hard-fought coalition deal with Merkel's conservatives.
Schulz tapped the party's parliamentary group leader Andrea Nahles to replace him as SPD chief, a role he himself held for just over a year.
Nahles, 47, would be the first woman to run Germany's oldest party.
"The party has to become younger and more female. After 150 years, the party finally belongs to a woman," Schulz told reporters at a Berlin press conference, flanked by Nahles.
"I believe that this step will appeal to large groups in our party," the 62-year-old said.
The SPD will hold a special party congress to propose Nahles for the leadership role.
That congress will take place after the SPD's 460,000 rank-and-file members vote on whether to approve the coalition deal hammered out with Merkel.
The result of the yes-or-no referendum is expected on March 4.
If they vote it down, Germany could be headed for fresh elections.