Cambodia's charismatic opposition leader, Sam Rainsy, says he will step down "for the sake of his party".
It comes after Prime Minister Hun Sen proposed banning anyone convicted of a crime from leading a political party.
Mr Rainsy has faced several lawsuits from the government and is currently abroad to avoid a two-year prison sentence for defamation.
His Cambodia National Rescue Party is seen as the main challenger to Hun Sen, who has led Cambodia since 1985.
Mr Rainsy announced his resignation on social media, but said: "In all circumstances I continue to cherish and uphold the CNRP's [Cambodia National Rescue Party's] ideals in my heart."
His party has described the defamation charges against him as politically motivated.
The CNRP made strong gains in the disputed 2013 elections, taking 55 seats while Hun Sen's party took 68.
Cambodia's next general election is scheduled for 2018.