Japan's centre-left Prime Minister Yukio Hatoyama resigned on Wednesday, less than nine months after taking power following a landslide election win.
Hatoyama, who took office in September, has seen his poll ratings plummet from more than 70 per cent to below 20 per cent amid a row over an unpopular US army base on the southern island of Okinawa.
Hatoyama initially promised to move the base off the island but backtracked and decided to keep it there, caving in to Washington but enraging Okinawans and his pacifist coalition partners the Social Democrats.
The left-leaning group quit his three-party coalition on Sunday, weakening the government in the upper house ahead of July elections, while Hatoyama's poll ratings plunged to a new low of below 20 per cent.
A tearful Hatoyama made the announcement at a special parliamentary meeting of lawmakers from his Democratic Party of Japan (DPJ), telling them: "I will step down" while also vowing to "create a new DPJ".
"The government's work has not reflected the public's wishes," the premier said, adding that he had also asked party heavyweight and secretary general Ichiro Ozawa to quit.
Ozawa has been embroiled in a funding scandal that has seen three of his current and former aides indicted. Prosecutors have also in the past questioned Ozawa and raided his offices.
Hatoyama, 63, named Ozawa's and his own funds problems and the Okinawa issue as the two main reasons for his resignation.
"I have caused trouble for the people of Okinawa," Hatoyama said. "We will need to make efforts to move the US base outside of Okinawa. But the result was that we could not deliver."