Icelandic Prime Minister Geir Haarde is stepping down.
Mr Haarde, 57, has been under growing pressure from a financial collapse that has led to violent protests.
He told a news conference on Friday he was going abroad soon for surgery to treat a malignant tumour of the oesophagus and would not seek re-election.
He said he wanted an early election to be held on 9 May. An election would not normally be held until 2011.
Mr Haarde, who became prime minister in June 2006. The global financial crisis hit Iceland, which has a population of 320,000, in October.
It triggered a collapse in the North Atlantic island's currency and financial system under the weight of billions of dollars of foreign debts incurred by its banks.
To stay afloat last year, Iceland negotiated a $US10 billion aid package crafted by the IMF and effectively froze trade in its currency.
Protests turned violent early on Thursday, with demonstrators pressing for Mr Haarde, the central bank governor and other senior officials to go.