President Zine al-Abidine Ben Ali of Tunisia said on Thursday he will not seek a new term in office in 2014, following widespread protests which have left at least 23 people dead.
The president also said he was also ordering police to stop using live fire against protesters.
The speech came after police fired live shots at protesters in the capital, Tunis, killing a man.
Human rights groups say more than 60 people have died in weeks of unrest.
Mr Ben Ali, 74, said there was "no presidency for life" in Tunisia.
He said he felt "very, very deep and massive regret" over the deaths and had ordered his interior minister to ensure that troops stopped firing on protesters unless they were under threat.
"I won't accept that another drop of blood of a Tunisian be spilled," he said.
The BBC reports that after the speech was broadcast, there were reports of cheering crowds gathering in the capital, and cars honking their horns.
Opposition leader Najib Chebbi welcomed the announcement, but said he was waiting to see "concrete details".
Tunisia gained independence from France in 1956. Mr Ben Ali came to power in 1987 and was re-elected to a five-year term in 2009 with 89.62% of the vote.
