Bulgarian Prime Minister Boyko Borisov announced his government's resignation on Wednesday following days of sometimes violent street protests in the European Union's poorest member.
The move paves the way for early elections, which had been due to be held in July.
"We have dignity and honour. It is the people who put us in power and we give it back to them today," Borisov told parliament, adding that he would not participate in an interim government.
Bulgaria has been shaken over the past week by protests that initially were about soaring electricity prices but which have turned into nationwide demonstrations against the right-wing government in general.
The clashes left dozens of people wounded and scores were arrested with demonstrators fighting running battles with riot police and vandalising government buildings in the capital Sofia.
Borisov on Monday attempted to ease the crisis by sacking his unpopular finance minister and on Tuesday by announcing he would revoke the licence of a Czech utility firm.