The Fiji opposition leader Mick Beddoes says he will step down to enable the Labour Party leader Mahendra Chaudhry to take up the position.
The Labour Party has formally rejected the prime minister Laisenia Qarase's invitation to join a multi-party cabinet.
Mr Chaudhry said Labour had done its best over the multi-party issue but it was time to disengage and Labour would now officially take the role of opposition.
He said calls were coming from all sides for Labour not to join the SDL and the party has to comply.
Mr Beddoes says although he expected the Labour announcement earlier, he's relieved it has finally been made, so he can concentrate on work for his United People's Party.
"I will, at the end of my engagement today tender my resignation to the president and he can proceed and make the appointment of Mr Chaudhry. The only change that comes with me is that will free up a fair bit of my time which I can then concentrate on party matters and other constituency matters that I would like to spend more time on."