The retirement of Fiji's president adds yet another building block to an array of illegitimate actions, says Foreign Affairs Minister Murray McCully.
Regime leader Commodore Frank Bainimarama made the announcement at a news conference on Tuesday afternoon.
Ratu Josefa Iloilo, who's 88 and has been in poor health for several years, is stepping down at the end of August.
It is not clear whether he is retiring of his own accord. Many have seen him as a puppet of the regime that seized power in a coup in 2006.
Mr Bainimarama said the president would go on leave from 30 July and the functions of his office would be carried out by Fiji's recently appointed vice-president, Ratu Epeli Nailatikau, a member of the commodore's inner circle.
No good news out of Fiji right now - McCully
Mr McCully says the change is just another factor to be considered by the Commonwealth Ministerial Action Group when it meets on Friday.
"There's no good news emerging out of Fiji at the moment," he says. "There is no immediate prospect that the international community is going to go opening any great doors for them to enter.
"Everyone really awaits the day when they decide that they really do want to re-engage with the international community and take the necessary steps to get there."