Boris Johnson is to stand down as leader of the Conservative Party, following a string of high-profile ministerial resignations.
Mr Johnson has spoken to 1922 Committee chairman Sir Graham Brady and agreed to stand down, with a new Tory leader set to be in place by the party conference in October.
A No 10 spokesman said: “The Prime Minister will make a statement to the country today.”
And after news broke of Mr Johnson's decision, the pound performed well in the markets with sterling gaining 0.4 percent to $1.197.
Adam Seagrave, UK Sales Trader at Saxo Markets, said: “The pound has improved this morning on the back of news that Boris Johnson has decided to resign as Prime Minister.
"Political uncertainty has been a factor in sterling struggling to pick up in recent weeks, though we think we will expect to see the currency to bounce back as more details of Johnson’s plan to step down are announced.
"Financial markets prefer certainty – and this situation is no different.
"After a strong morning for European stocks in general, we could see further improvements in days to come as longer term plans in the UK's parliament become clearer."
It comes after the pound hit a two-year low against the dollar on Tuesday amid growing fears for the future of Britain's economy.
Chancellor Rishi Sunak and Health Secretary Sajid Javid dramatically quit their Cabinet roles on Tuesday, with both stating they had lost confidence in the PM.
This followed a number of scandals to hit the Government, the latest being the resignation of Deputy Chief Whip Chris Pincher.
The pound has surged against the dollar
Dominic Lipinski
Prime Minister Boris Johnson
JOHN SIBLEY