Ms Ardern choked back tears on Thursday as she said she did not have the energy to seek re-election.
"I know what this job takes. And I know that I no longer have enough in the tank to do it justice," she said.
"I would be doing a disservice to continue."
Ms Ardern said the Labour party would elect a new leader by the weekend but deputy prime minister Grant Robertson would not be a candidate.
The bombshell announcement came in Napier at the party's year-starting caucus retreat.
Ms Ardern was expected to announce an election date - which she did, for October 14 - but shocked all-comers by declaring her exit from politics.
She said she left without regrets, offering a simple way she would like to be remembered.
"As someone who always tried to be kind," she said.
Ms Ardern also addressed her family; her fiance Clarke Gayford and four-year-old daughter Neve.
"Neve, mum is looking forward to being there when you start school this year," she said.
"And to Clarke - let's finally get married."
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