Ms Collins took the job in July 2020 after the shock resignation of Todd Muller, presiding over a thumping defeat to Jacinda Ardern's Labour in last October's election.
On Thursday morning, she lost the faith of her caucus after a three-hour emergency partyroom meeting, and the party will convene on Tuesday to determine her successor.
"I am pleased to say that I am just the MP for Papakura again," she wrote on Twitter, ending a three-and-a-half hour wait for information from the closed-door meeting.
"It's been a privilege to take over the leadership ... during the worst of times and to do so for 16 months. It has taken huge stamina and resolve."
Deputy Shane Reti has been handed the role on an interim basis as the party takes stock.
"The caucus moved a motion for a vote of no confidence in the leader and that motion was successful," Dr Reti said.
"This is not our best day but we will raise our eyes to the sky."
Ms Collins' downfall was in keeping with her political character: dramatic and divisive.
On Wednesday night, she demoted former leader - and possible leadership rival - Simon Bridges for a lewd comment he made in 2017 towards caucus member Jacqui Dean.
The incident was reported at the time to then-leader Bill English, and Mr Bridges apologised.
However, Ms Collins says she only just learned of the comments, saying they caused "ongoing distress" and constituted "harassment and intimidation".
The resurfacing of the comments was seen as political, prompting a vicious backlash and the emergency caucus meeting.
Mr Bridges - who led the party between 2018 and 2020 - described the play as "truly desperate stuff" as he headed into the meeting.
"It shows that she'll go to any length to hold on to her leadership of the National party," he said.
Another MP, Simon O'Connor, called for Ms Collins to resign, saying "the way that this has been handled is just outright appalling".
"Judith's leadership is no longer sustainable," he told Radio NZ.
After the meeting, Mr Bridges owned up to the "inappropriate" comments, saying he was "very regretful".
He also said he would consider standing as leader in Tuesday's election, when former Air New Zealand chief executive Christopher Luxon and ex-policeman Mark Mitchell could also put themselves forward.
National suffered their worst election result in two decades in last year's election, and remain well behind Ms Ardern's Labour party in the polls.
The new leader will be National's fifth since the 2017 election, following Bill English, Mr Bridges, Mr Muller and Ms Collins.
Ms Collins has pledged to stay on in parliament and stand again in the 2023 election.
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