John Key is resigning as Prime Minister of New Zealand.

Key made the announcement at his weekly press conference this afternoon.

The Herald understands that Key's wife Bronagh asked him to resign.

Key, his voice shaking with emotion, said he told his Cabinet of his decision this morning

"This is the hardest decision I've ever made and I don't know what I'll do next."

Key cited family reasons for leaving, saying the job had required great sacrifices "from those who are dearest to me".

His wife Bronagh had endured "many lonely nights" and his children Stephie and Max had been put under "extraordinary levels of intrusion".

Key met his wife Bronagh while attending Burnside High School. The pair married in 1984 and have two children, Stephie and Max.

Bill English is expected to take over as Prime Minister and Steven Joyce is expected to take on the finance role.

The National Party caucus will hold a meeting on December 12 to decide the new party leader and Prime Minister.

Key said he would support whoever the caucus chose, but he endorsed Bill English as his replacement.

"There's no way I could have served out a full fourth term," said Key.

Being a politician had always come at a cost for his family.

Key said leaders seemed to stay too long and he felt this was the opportunity to go out on top.

He said he didn't have any plans. He was looking forward to enjoying a slightly quieter life in which he would take posts on boards and spend time travelling with his spouse.

He also said it was the right time to leave, as National were polling at nearly 50 per cent and the economy was growing.

Key cancelled his weekly scheduled interview with NewstalkZB at the NZME offices in Auckland this morning, and instead was interviewed over the phone from Wellington.

New Zealand First Leader Winston Peters said of the resignation: "The fact is that the economy is not in the healthy state that the Prime Minister has for so long claimed, and there are other issues which have caused this decision as well.

"The New Zealand public should have been informed of this a long time ago.

"Clearly the Prime Minister does not believe the superficial polls any longer.

"Contrary to certain perceptions the Prime Minister and his Finance Minister are unable to muddy the waters anymore."

Key has led the National party since 2006.

Key built a career in foreign exchange in New Zealand before continued success in the industry overseas.

He entered Parliament in 2002 as National's representative for Helensville. In 2004 he was appointed Finance Spokesman for the party and succeeded Don Brash as party leader in 2006.

Key led his party to win the election in November 2008 and repeated the victory in 2011 and 2014.

Key has governed the country through the recession of the late-2000s, formed the Canterbury Earthquake Recovery Authority in response to the aftermath of the 2011 Christchurch Earthquake and created a much-protested policy for the partial privitisation of five state-owned enterprises.

Key has also withdrawn the NZ Defence Force from Afghanistan and worked to establish the TPP with the United States.

(Source: NZ Herald)