Metiria Turei has resigned as co-leader of the Green Party, withdrawn from the party list and will retire at the election.
The embattled MP had earlier said she would stay on until at least after the election, following her admissions of electoral and benefit fraud.
A release from the party says since opening a conversation about the reality of poverty in New Zealand and the solutions to it three weeks ago, Metiria Turei and her family have been under extreme scrutiny.
"I knew that by telling my personal story, it would help people hear and understand the reality of poverty. And that has happened - thousands of people have contacted the Green Party with their stories, and many have come forward to tell these in the media as well," Mrs Turei said.
"I also knew that it would open the way for people to criticise me - and I knew the risks of that - but the intensity of those attacks has become too much for my family, and they are now getting in the way of our ability to communicate our solutions - not just for poverty, but for water, climate change and the environment," she said.
"Resigning as Co-Leader is my decision. The party did not ask me to resign and as recently as last night the executive gave me a vote of confidence."
Green Party co-leader James Shaw has thanked Metiria Turei for her long years of service to the Green Party.
"Metiria has been a servant for the party, the environment and for our people for many years. Her dedication and commitment have been unparalleled. As I have said, she chose to tell her story in order to open a conversation - and she has done that" Mr Shaw said.
"I urge everyone who believes in the environment and our people, including those who have come forward in the last few weeks, to continue with their support. It is more important than ever that we change the government," he said.
Metiria Turei will no longer be on the Green Party list but will campaign for the party vote only in Te Tai Tonga.
James Shaw will be the sole co-leader for the election. This is consistent with the approach when Co-Leader Rod Donald died ahead of the 2005 election, the party release said.
The Green Party will select a new female co-leader at a general meeting, it said.
Turmoil in Green Party over Turei's admissions
Ms Turei recently admitted to electoral fraud in remaining on the electoral roll for a seat she did not live in so she could vote for a friend who was standing.
She is meanwhile being investigated for self-confessed welfare fraud in the 1990s when she was a solo mother.
The Work and Income New Zealand investigation was sparked after Ms Turei publicly told authorities she was living alone despite subletting some of her rooms to flatmates, one of them her mother.
Last Friday, she vowed to stay on as co-leader, despite growing calls for her resignation by political rivals.
She said then that she would not be seeking a ministerial position in a potential Labour-Green coalition Government.
On Monday Green MPs Kennedy Graham and David Clendon removed themselves from the party list, pulling out of next month's election, saying she was not fit to lead the party.
The two men withdrew from the party caucus yesterday after moves to suspend them.