Tony Blair said on Thursday he would step down as prime minister on June 27, more than 10 years after winning power in what was hailed as a new dawn for Britain that has since been darkened by the Iraq war.
"I tell you one thing: hand on heart, I did what I thought was right," Blair told Labour Party members on Thursday. "I may have been wrong, that's your call. But believe one thing, if nothing else I did what I thought was right for our country."
Blair's announcement triggers a contest for the leadership of the ruling Labour Party, which finance minister Gordon Brown is favourite to win. Brown would become prime minister when Blair resigns next month.
Blair, US President George W. Bush's closest ally over Iraq, leaves office out of favour among voters for sending British forces to join the 2003 US-led invasion.
A Labour Party rebellion in September forced him to say he would quit within a year, after serving 10 years.
"I think that's long enough, not only for me, but also for the country and sometimes the only way you conquer the pull of power is to set it down," Blair told party members in Trimdon in his northern England constituency.
Blair will also be remembered for helping bring peace to Northern Ireland after decades of violence, winning three straight elections for Labour for the first time and dragging it from its left-wing roots to the centre of British politics.
An opinion poll published by the Guardian newspaper on Thursday showed 60 percent of voters believed Blair would be remembered as a force for change, though not always good. The ICM poll said 44 percent believed he had been good for Britain.
Labour Party Chairman Hazel Blears said Blair's departure was a bitter-sweet moment: "He's gone at a time of his choosing, in the way that he wanted to go and that is absolutely right.
 Blair had long been expected to hand over power before the end of his third term to let another Labour leader guide the party into the next national elections due by May 2010.
Brown, whose official residence is next door to Blair's in London's Downing Street, has waited with increasing impatience for the departure of his neighbour. Critics say their rivalry, often bitter, has diluted the government's effectiveness.
Blair quits as only the second prime minister in a century to have served 10 years, tainted by a corruption scandal in which he became the first serving prime minister to be quizzed by police in a criminal probe.
Detectives twice questioned Blair as a witness in their investigation into a political party funding scandal.
Blair and Brown were the twin architects of Labour's rise to power in 1997 after 18 years in the political wilderness. 
Conservative leader David Cameron, 40, has revitalised the party of Margaret Thatcher -- the only prime minister to hold power longer than Blair in the past century -- since he became leader in 2005. Polls suggest he could win a slim majority in parliament in national elections.
Prescott to quit
Britain’s colourful deputy prime minister John Prescott also announced his intention to resign, after Prime Minister Tony Blair confirmed he was stepping down.
“Tony and I were elected together back in 1994 and it has been an honour to serve as deputy to the most successful Labour prime minister ever,” Prescott said in an open letter to his constituency in Hull, in northeast England. “To have been deputy leader and the longest-serving deputy prime minister is a matter of great pride to me,” he wrote, after Blair said he would stand down on June 27.