Greece's Prime Minister Alexis Tsipras has announced he is resigning and has called an early election.
Mr Tsipras has faced a rebellion within his ruling hard-left Syriza party over a new bailout deal which has been agreed with international creditors.
Greece received the first €13 billion tranche yesterday, allowing it to repay a debt to the European Central Bank and avoid a messy default.
But the austerity measures needed for the deal angered many in his party.
Mr Tsipras had to agree to further painful state sector cuts, including far-reaching pension reforms, in exchange for the bailout - and keeping Greece in the eurozone.
The overall bailout package is worth about €86 billion over three years. The payment of the first tranche was made on Thursday after the bailout deal - Greece's third in five years - was approved by relevant European parliaments.
Alexis Tsipras made the announcement in a televised state address.
He will visit President Prokopis Pavlopoulos later in the evening to submit his resignation. Greece will then be run by a caretaker government.
Energy and Environment Minister Panos Skourletis earlier said on state TV: "The certainty is that the need for elections has arisen."
Reacting to the news, Martin Selmayr, European Commission President Jean-Claude Juncker's chief-of-staff, tweeted that "swift elections in Greece can be a way to broaden support" for the bailout deal.
Some 43 of Syriza's 149 MPs had either opposed the bailout or abstained in last Friday's Greek parliamentary vote that approved the deal.
The rebellion meant Mr Tsipras, who was elected this January, had effectively lost his parliamentary majority.
Mr Tsipras had won power on a manifesto of opposing the stringent austerity conditions that he has now accepted.
He said he was forced to do so because a majority of Greeks wanted to stay in the eurozone, and this could not be achieved in any other way.
Greece remains under strict capital controls, with weekly limits on cash withdrawals for Greek citizens.
If a government resigns within a year of election, the constitution requires the president to ask the second-largest party - in this case the conservative New Democracy - to try to form an administration.
If this fails, the next largest party must be given a chance.
However, analysts say both parties can waive this and allow the president to approve the snap election.