- UKIP leader Nigel Farage played a key role in campaign for Britain to leave EU
- Critics have accused him and his party of peddling racist and xenophobic views
He said the party was "in a good position" following the EU referendum and that his political ambition had been achieved.
"I came into this struggle from business because I wanted us to be a self-governing nation, not to become a career politician," Farage said.
"During the referendum campaign I said I want my country back. What I'm saying today is I want my life back."
It's not the first time Farage has said he would resign as the UKIP's leader. In 2015 he offered to step down after the election, but party members urged him to stay on.
Who is Nigel Farage?
For years Farage has operated on the political fringes -- ironically as a member of the European Parliament -- campaigning against the EU and what he characterized as its looming shadow over British sovereignty.
He was a former Conservative who left the party in 1992 after Britain signed the Maastricht Treaty, which led to the creation of the EU and its shared currency, the euro.
Farage then became a founding member of the UKIP, which opposed Maastricht and had a mandate to move Britain away from Europe.
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In an interview with CNN following the June 23 "Brexit" vote, Farage said: "I was written off as being a lunatic, and politically the support for this was absolutely tiny.
"The little idea was considered a little kooky, and 17 million voted for it ... and I couldn't be happier."
Farage's comments have been controversial, with critics accusing him of peddling racist and xenophobic views.
He has long campaigned against Britain's open immigration policy with the EU, saying it has led to an influx of people who have damaged cohesion and created divisions within society.
Farage caused a stir when his party unveiled a poster before the referendum with the words "Breaking Point. The EU has failed us all," showing an image of migrants entering Europe last year. Opposition politicians dismissed it as "divisive" and "hate-filled."
What's next for UKIP?
Farage's resignation means the UKIP will join the Conservatives, who are also searching for a new leader. Boris Johnson, considered the favorite to replace outgoing Prime Minister David Cameron as Conservative Party leader, delivered a bombshell last week when he announced he didn't want the job. Cameron had said he would resign after losing his campaign to persuade voters to remain in the EU.
Following Farage's announcement, Douglas Carswell, the first elected member of Parliament for the UKIP, posted a smiling emoji with sunglasses on Twitter.
When asked about the tweet, Farage said: "Well, I'm pleased that he's smiling because that's not something I've seen very often from him, so it's obviously very good news."
Possible successors -- other than Carswell -- include the party's deputy leader Paul Nuttall, immigration spokesman Steven Woolfe, culture spokesman Peter Whittle, deputy chairman Diane James and suspended former deputy chairman Suzanne Evans.
Farage declined to endorse a candidate but said, "May the best man or best woman win."