Sharples not pushed to resign
The 71-year-old said this morning it was "clear" leadership issues had taken a toll on the party.
He denied he was forced to resign.
"I made the decision because I have to think 'what is the best for the party?'
"Our people deserve a unified Maori Party."
Dr Sharples says he will remain as co-leader until a replacement is decided.
He will give up his ministerial portfolios several months before the next election to allow the new co-leader to become familiar with them.
The choice to resign also means he can spend more time with family.
Dr Sharples said his resignation was not a direct result of the Ikaroa-Rawhiti by-election. During his travel through the electorate in the lead up to the by-election the leadership issue had been brought up by many people, he said.
"It worried me a little bit. Rather than the results [of the by-election] it was still there among the people."
He said the party had made "marvelous" gains for Maori, which largely went unnoticed by the public.
Tariana Turia will remain in her role as co-leader until the next election. However she has said she would resign following next year’s general election.
She said Dr Sharples’ decision was the right one, but it did not signal the end of the Maori party.
"They're just playing politics."
"In the end, our people have to decide whether they want to continue living in a state of activism, always fighting on the sidelines or whether they want the political movement that is about progressing their issues and that's what the Maori Party stand for."
The party had started going through the process of finding new potential candidates and could be known by early next year.
She said it was time for the party to have a united front.
"The strange thing about it is that we've always been united. We may have had difference of view about the leadership issue, but we've always been united."
Breaking away from the confidence and supply agreement with National because of the perceived poor public perception of the relationship was not the right thing.
"No, because then we could sit in opposition and do nothing. We've made huge gains over the last few years that we've been sitting at the table of government."
Te Uroroa Flavell said him becoming the new co-leader of the party would be an issue for the party’s annual general meeting.
The Maori Party finished third in the by-election behind Mana and Labour at the weekend.
The result was worse than the 2011 general election when the party came second behind Labour candidate Parekura Horomia.
Dr Sharples put the loss partly down to the public's perception of the leadership squabble with Te Uroroa Flavell.
In March, party co-leader Tariana Turia said Dr Sharples should reconsider his future as leader in the wake of Mr Flavell's leadership challenge.
"I think he needs to give consideration to that, and at the moment he doesn't think so," she said at the time.
Pita Sharples' career:
- Born Peter Russell Sharples in Waipawa in 1941
- Head boy at Te Aute College
- Studied education at Auckland University, gaining PhD, worked in kohanga reo and kura kaupapa
- Worked in communities, with iwi, troubled youth, gangs and prison inmates
- Formed the Maori Party in 2004 with Tariana Turia
- Entered parliament after winning Tamaki Makaurau in 2005
- Minister of Maori Affairs in the National government since 2008
- Associate minister of Corrections and Education