George Papandreou announced Wednesday he is stepping down as Greek prime minister to clear the way for a new coalition government.
“I wish the next premier good luck,” he said in a televised address.
He did not name his successor, but party leaders earlier agreed on house speaker Filippos Petsalnikos to head the country's new coalition government.
"I believe the choice we have made is in line with the institutions and will boost the democratic institutions," Papandreou said.
Greece should stay in the eurozone and carry out the EU debt bailout deal, he said.
Papandreou said earlier this week he would go in order to help form a coalition government comprising his socialist PASOK party and the center-right New Democracy party.
The new government is to hold parliamentary elections, set for February 2012.
On October 27, the EU and IMF agreed to grant Greece another 100 billion euros to stabilize its economy and reached an agreement with private creditors to forgive 50 percent of Greece’s debt.
