Don Brash has stepped down as Act leader.
He said he would be tendering his resignation to the Act Board tomorrow.
His decision follows the victory of Act candidate John Banks in the Epsom electorate.
However, the party vote was not high enough to give Act any more MPs.
Banks finished with a majority of 2485 over National's Paul Goldsmith with Labour's David Parker trailing far behind.
The lead had been up and down throughout the evening but Banks later pulled away.
Banks said "tonight was about thanking people", and said he "didn't have any doubts he'd win".
Act leader Don Brash said "we did it" and that Banks did "a fantastic job".
Follow the Epsom results here
With Act far off the 5 per cent party vote threshold in pre-election polls, winning the Epsom seat was regarded as being the only way for the party to be returned to Parliament.
National leader John Key endorsed Banks for the seat following their infamous 'cup of tea' meeting in Auckland suburb of Newmarket.
Key said at the time he was supporting Banks because he wants National to stay a centrist, balanced moderate Government.
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