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14 February 2018, 07:20 | Damon Campbell
GETTYAngela Merkel's popularity has plummeted as she scrambles to secure another term as Chancellor
Tuesday's announcement caps off a turbulent week for the former SPD leader, after his party agreed a coalition deal with German Chancellor Angela Merkel's Christian Democrats (CDU) and their Bavarian allies the Christian Social Union (CSU) last Wednesday.
On Tuesday, Schulz said he hoped his decision to resign would result in party members focusing on the coalition treaty rather than personnel issues.
"I depart this office without bitterness or resentment", he said, nearly a year after he was elected as SPD party head with 100 percent of the vote. "It was right when Martin Schulz proposed Andrea Nahles take over the interim leadership", Malu Dreyer, the influential regional prime minister of Rhineland-Palatinate said.
Just two days after the coalition deal was struck, Schulz announced he was abandoning his bid to serve as Germany's next foreign minister after heavy criticism from his party for seeking the job after he previously said he wouldn't serve in the next German government.
German's Social Democratic grass roots are in revolt and may veto a new government in their upcoming vote.
The planned handover of the SPD leadership from Martin Schulz to Andrea Nahles is also viewed with skepticism, according to a survey by Emnid for Sunday's edition of the Bild newspaper.
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Kevin Kuehnert, who leads the SPD's youth wing and is campaigning for members to vote against another tie-up with Merkel, welcomed the decision as he said it would enable the party to focus completely on the members' coalition ballot. He told German news agency, "Die Welt", that "there no statutory basis exists in the SPD's rules that allows for the appointment of a new party leader".
Schulz is expected to take a seat on the SPD's backbenches.
Many within the SPD harbour misgivings about sharing power with Merkel, believing the party should rebuild in opposition after suffering its worst result in last September's election since Germany became a federal republic in 1949.
In a cartoon on Tuesday, the Sueddeutsche Zeitung daily showed Nahles with a whip riding an SPD snail.
Michael Fuchs, a former member of parliament with Merkel's Christian Democratic Party (CDU), said he is optimistic that Germany's finances will continue to be run efficiently.
The SPD originally wanted to reinvent itself in opposition but reconsidered when Merkel's attempt to form an alliance with two smaller parties failed late previous year.
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She cited the full-time job gain, faster wages and a low unemployment rate as signs of a resilient labor market. In a labour force of 39,200, this region saw 37,700 people employed in January - while 1,500 were unemployed.