Pakistani President Pervez Musharraf, a key Western ally in the fight against terrorism, has resigned rather than being forced out by his political enemies.
The former chief of the army announced his decision in a televised address last night - hours before Pakistan's Parliament was to have launched impeachment proceedings against him.
A grim-faced Mr Musharraf said he was resigning to "bring the nation out of turmoil".
"Impeachment would destabilize the country," he said. "After viewing the situation and consulting legal advisers and political allies, with their advice I have decided to resign."
Mr Musharraf, 65, who seized power in a military coup in 1999, had been under intense pressure from the governing coalition to step down before it launched the first impeachment proceedings in Pakistan's 61-year history.
His resignation clears the way for the four-month-old Government to choose a new president.
But there were intense concerns in Washington that Mr Musharraf's departure would open a new era of instability in the nuclear-armed country of 165 million people.
His announcement was greeted with demonstrations of joy in the streets of Lahore and other cities, and was hailed by the son of slain former Pakistani prime minister Benazir Bhutto.
"After the martyrdom of my mother I said that democracy was the best revenge - and today it was proved true," said 19-year-old Bilawal Bhutto Zardari, chairman of the Pakistan People's Party.
Asif Ali Zardari, his father, is the effective chief of the PPP and is reported to be in the running to replace Mr Musharraf.
The party won the most seats in elections in February and now leads a coalition government that also includes the party of Nawaz Sharif, the former prime minister ousted by Musharraf.
Mr Musharraf's popularity plunged last year after he sacked opponents in the Supreme Court and called a state of emergency. He was severely weakened when his political allies were trounced in the February elections.
He was also backed into a corner by the resurgence of Islamic militants in the tribal areas along Pakistan's border with Afghanistan, who launched a wave of attacks last year that left more than 1000 people dead.
Pakistanis gathered around television sets across the nation last night to listen to a tired-looking Mr Musharraf deliver an hour-long speech, in which he said he had helped establish law and order, improve democracy and human rights and boost the country's stature. "On the map of the world Pakistan is now an important country, by the grace of Allah," Mr Musharraf said.
He dismissed accusations of misconduct that would have been on a "charge sheet" against him. "Not one charge against me can be proved," he said.
He concluded emotionally, raising his clenched fists and declaring: "Long live Pakistan!"
Responding to the announcement, US Secretary of State Condoleezza Rice last night paid tribute to Mr Musharraf, saying he had been "a friend to the United States and one of the world's most committed partners in the war against terrorism and extremism."
She urged Pakistan's political leaders to "redouble their focus on Pakistan's future and its most urgent needs, including stemming the growth of extremism".
A spokesman for British Prime Minister Gordon Brown also praised Mr Musharraf, but said relations with Pakistan did not depend on one individual.
Australian Foreign Minister Stephen Smith called for political stability in Pakistan. "It is important that the Government of Pakistan now moves with purpose to tackle the security and economic challenges facing the country," he said.
India declined to comment, with the Foreign Ministry describing it as an "internal matter" for Pakistan.
A whisky-tippling moderate, Mr Musharraf won praise for trying to tackle militants and for presiding over record economic growth. He has also shown steely nerve in what has been dubbed the world's most dangerous job - he escaped at least three assassination attempts.
He joked about leaving the running of the country to the Government and playing tennis and golf instead, but his real sport has been holding power. He has named as role models Napoleon and Richard Nixon - two men known, among other things, for their tenacity.
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To hell with the Bhutto family.