Her resignation is effective Aug. 4, the former premier said in a statement. She is also leaving as a member of the legislature serving the riding of Kelowna-West.
"Serving as premier and serving the people of B.C. for the past six and a half years has been an incredible honour and privilege,'' Clark said. "I am certain that B.C.'s best days lie ahead.''
Clark broke the news to her Liberal caucus in Penticton where members had gathered to prepare for their new political roles in Opposition after 16 years as government.
An emotional Rich Coleman, a former cabinet minister in the Liberal government, said Clark stepped aside to allow the party to elect a new leader and begin a process of renewal.
The party executive now has 28 days to set a date and plan for a leadership vote, said Coleman, who will serve as interim leader.
"I've never worked with anyone with more passion and love, strength of leadership and management in my entire life,'' he said. "What she's given this province should never be forgotten. It's a tough day for our family, our B.C. Liberal family.''
Former Liberal cabinet minister Terry Lake said Clark likely struggled with her choice but decided to put the growth of the party ahead of her remarkable political career.
"Given the results of the election and the mood ... of British Columbia, and probably within the party and the caucus, she thought that her stepping aside would be the best thing for all the people involved,'' he said in an interview.
Former cabinet minister Bill Bennett said Clark could have stayed as leader, but he understands her choice to make room for renewal.
"I'm not happy about the decision,'' he said. "I wish she had hung on, but I understand why she thinks it's better for the party to have fresh leadership.''
Clark, 51, led a come-from-behind victory in 2013, sweeping her party to a surprise win over the New Democrats who held a 20-point lead in the polls at the start of the campaign.
But she couldn't pull off a majority government in the election this May, winning 43 of 87 seats in the legislature, one short of a majority.
The Liberal government lost a confidence vote at the end of June.
Clark said that when she offered her resignation to Lt.-Gov. Judith Guichon she tried to convince Guichon to call an election. Instead, the lieutenant-governor asked New Democrat Leader John Horgan to form government.
Praise from BC Green leader
The New Democrats, with 41 seats, formed a minority government with the support of the Greens, who won three seats. Horgan and his cabinet were sworn in last week.
Horgan said in a statement that Clark was a dedicated servant of the province.
"As an MLA and as premier, Ms. Clark fought passionately for what she believed in,'' he said. "I know she will take that passion and energy to her next opportunity.''
Green party Leader Andrew Weaver issued a statement thanking Clark for her service, calling her a fierce advocate for the province both at home and abroad.
"A highlight of my time in the legislature was working directly with Christy Clark to implement sexualized violence policy legislation for B.C.'s post-secondary institutions,'' he said.
"Her leadership and willingness to work across party lines on this vital issue has made universities and colleges across this province safer for our students, and for this I am grateful.''
Clark was first elected to the legislature in 1996 and became deputy premier and education minister after the Liberals' landslide victory in 2001. She left government in 2005 to spend more time with her family.
She won the B.C. Liberal leadership in 2011 and became the first woman in the province to lead a party to victory two years later.
Her government became known across Canada for consecutive surplus budgets while other provinces struggled with deficits.
Clark faced the prospect of sitting on the Opposition benches and was likely to be reminded of her education policies that led to a lengthy legal battle that ended with a Supreme Court of Canada victory for teachers in November 2016.
The Clark government's approval of the $8.8-billion Site C dam project is also likely to be the focus of much debate as the NDP government plans to submit the project to a review process.
Lake said it must have upset Clark to walk away from the political battles looming on the horizon.
"Success is not for quitters,'' Clark's government said in a February 2016 throne speech.
Author: Dirk Meissner