"The discussions within the parliamentary faction and feedback from within the party have shown me that I no longer have the necessary support to carry out my duties," Nahles said in a statement.
Andrea Nahles' decision follows the SPD's poor results in the European parliamentary elections, which reduced the SPD to Germany's third-biggest party after its coalition partner, the CDU, and the Greens.
Nahles became leader of the SPD in April 2018, having led the party in the national bundestag since September 2017. She was also the first woman to head the party.
The European Parliament elections to the 751-seat parliamentary institution were held across EU member states from May 23-26.