Truss, who spent 45 days in office, said she would step down after a week-long emergency contest to find her successor.
She said: “I entered office with a vision for a low-tax, high-growth economy that would take advantage of the freedoms of Brexit,
“I recognise that, given the situation, I cannot deliver the mandate on which I was elected by the Conservative party. I have therefore spoken to His Majesty the King to notify him that I am resigning as leader of the Conservative party.
“This morning I met the chairman of the 1922 Committee, Sir Graham Brady. We’ve agreed that there will be a leadership election to be completed within the next week. This will ensure that we remain on behalf to deliver our fiscal plans and maintain our country’s economic stability and national security. I will remain as prime minister until a successor has been chosen.”
More than a dozen Conservative MPs have publicly urged Truss to resign just six weeks into office, after her tax-cutting plans caused a market meltdown during an already severe cost-of-living crisis.
Many more are reported to have submitted letters calling for her to be removed, although party rules currently forbid another leadership campaign for 12 months.