The UK is set to have a new prime minister on Wednesday as Home Secretary Theresa May is given the keys to Number 10.
David Cameron made the announcement after Mrs May's only rival in the Conservative leadership race, Andrea Leadsom, withdrew from the campaign.
Mr Cameron said the 59-year-old Maidenhead MP would take over from him after his last Prime Minister's Questions, when he would then offer his resignation to the Queen.
Theresa May is due to take over from David Cameron as PM
The outgoing PM, who announced last month he was resigning after losing the EU referendum, told reporters he was "delighted" that Mrs May would be his successor, describing her as "strong" and "competent".
He said: "She is more than able to provide the leadership that our country is going to need in the years ahead and she will have my full support.
"With these changes we don't need to have a prolonged period of transition so tomorrow I will chair my last cabinet meeting."
Mrs May was later confirmed as the new Tory leader by the chairman of the party's 1922 Committee, Graham Brady.
One of her big tasks will be negotiating the UK's withdrawal from the European Union.
Around lunchtime, Mrs Leadsom, 53, said she was pulling out of the leadership contest shortly after apologising to her rival after appearing to suggest the fact that she was a mother gave her the edge over the childless Mrs May.
The junior energy minister and Brexit supporter said a nine-week leadership campaign to succeed Mr Cameron at such a critical time for the UK would be "highly undesirable".
Mrs Leadsom said Mrs May - who backed staying in the EU - was ideally placed to implement Brexit and offered the Home Secretary her full support.
Mrs May has also received the backing from leading Brexit supporters Michael Gove and Boris Johnson.
Chancellor George Osborne wrote on Twitter: "Welcome news we have 1 candidate with overwhelming support to be next PM. Theresa May has strength, integrity & determination to do the job."
Mrs Leadsom's announcement she was quitting the race came a little more than an hour after Mrs May launched her national campaign in Birmingham, seeking to present herself as the candidate of unity and experience with overwhelming support from Conservative MPs.
Mrs May repeated her vow that "Brexit means Brexit", as she insisted there will be "no attempts" to remain in the EU or to rejoin it "by the back door".
"As prime minister, I will make sure we leave the European Union," she said.
She finished top in the MPs' ballot last week with 199 votes to Mrs Leadsom's 84.
Mr Cameron's departure had not been expected to take place until after the end of a ballot of 150,000 Conservative members on a new leader on 9 September.
There have been demands from Labour and the Liberal Democrats for Mrs May to call a snap general election, rather than wait until 2020 for the next scheduled contest under the fixed-term parliaments rule.
Lib Dem leader Tim Farron said: "With Theresa May's coronation we need an early general election. The Tories now have no mandate. Britain deserves better than this."
Labour election co-ordinator Jon Trickett has said he is putting the whole party on a general election footing, on the same day Angela Eagle launched a bid to get rid of leader Jeremy Corbyn.
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