The coup leader and twice-elected prime minister lost power following the 2022 elections, when Fiji's three other parties formed a coalition under new prime minister Sitiveni Rabuka.
Last month, Mr Bainimarama was suspended from parliament for three years after an inflammatory speech.
In a Facebook post on Wednesday, Mr Bainimarama said the punishment meant it was best for him to depart.
"Whatever you or I may think of the decision, you and I will need to bear with it and respond in a positive and strategic manner," he said.
"Given the need to maintain our numbers in parliament over the next three years, and the need for FijiFirst to be on the ground at all times ... I have tendered my resignation from parliament, with immediate effect."
Mr Bainimarama seized power in the Pacific nation with a 2006 coup before creating the FijiFirst party which won elections in 2014 and 2018.
However, FijiFirst fell short of a majority in the general election in December last year which left Fiji's parliament delicately poised.
Mr Rabuka governs with 29 MPs - including 21 from Mr Sitiveni's People's Alliance, five from the National Federation Party and three from the Social Democrat Liberal party - to FijiFirst's 26 in opposition.
Mr Bainimarama, who refers to the coalition as a "three uneven legged stool", said FijiFirst would nominate Inia Seruiratu to lead the parliamentary party, but he would retain power.
"Please be assured that I will still continue to be the leader of FijiFirst," he said.
"I want to assure all our supporters and all Fijians that you will be seeing more of me on the ground as I engage with you to listen to your needs, wants and concerns."
Mr Seruiratu held several ministries including defence in Mr Bainimarama's government.
Mr Bainimarama closed his five-minute Facebook video with a shoutout to the country's rugby sevens side, which won Olympic gold at the past two Olympics but struggled at recent World Sevens meets.
The 68-year-old likened the team's fortunes to his party's, saying "as we all know, the sevens team under our leadership symbolised unity and nationhood that was and can still be achieved".
"I would like to encourage our sevens team not to lose hope despite recent setbacks. I know it has been tough," he said.
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