In a statement, Mr Drakeford said he will remain as first minister until his successor is picked by his party, which he says will be before Easter.
Mark Drakeford said: “When I stood for election as Leader of Welsh Labour, I said I would stand down during the current Senedd term. That time has now come.
“It has been a great privilege to serve as leader of this party. Together, we have achieved a huge amount over the last five years in some of the toughest times we have known.
“Despite all the chaos in Westminster, the ongoing impact of Brexit, climate change and the pandemic, by working together, we have delivered record results for Welsh Labour in the local government and Senedd elections.
“Our greatest task is still ahead of us – to return a Labour UK Government and start repairing the huge damage which has been inflicted by the Tories over the last 13 years.
“I will work tirelessly to secure that Labour victory and to continue delivering on the promises we made to people all across Wales in 2021 to deliver a stronger, fairer and greener Wales.”
Senedd colleagues and opposition politicians have paid tribute to Mr Drakeford.
Education minister, Jeremy Miles MS said: “Mark Drakeford is an extraordinary man who has led Wales through extraordinary times.
“He has been a beacon for compassion in our politics, and an example of public service to our nation.
“When he steps down as First Minister and Welsh Labour Leader, he will be able to look back on a career dedicated to helping others – as a probation worker, as a professor of social policy, as an adviser to Rhodri Morgan, as a Minister and as First Minister of Wales.
“Much will be said about his political life and his many accomplishments. I want to pay personal tribute to the person we have all seen bear the weight of leading a nation through the most difficult times – with integrity, dignity and strength.
“As we consider what comes next, I hope we will resolve to build on Mark’s legacy, to meet new challenges head on, and to set our sights on an ambitious future for Wales.”
Shadow Secretary of State for Wales, Jo Stevens MP said: “Mark Drakeford has epitomised public service and public duty throughout his time as First Minister of Wales. His remarkable stewardship of Wales through the horror of the pandemic being the most obvious example.
“Leading our country with care, skill and values firmly rooted in our Labour principles of social justice and progressive politics, he has dedicated so much of his life to bringing positive change to the people of Wales.
“Mark has been there throughout our devolution journey, both as an architect and a builder. He has been instrumental in Welsh Labour’s electoral success throughout the last 25 years and has earned the respect of opponents across the political spectrum.
“As Mark ends his term as Welsh Labour Leader, I thank him for his leadership, his friendship and his outstanding contribution to Wales.”
Leader of the Welsh Conservatives, Andrew RT Davies MS said: “I wish Mark well as he stands down from the helm.
“While we may have different visions for Wales, I know I’m joined by colleagues in holding a huge amount of respect for his dedication to the job of First Minister.
“It’s important, however, with this announcement that there is no distraction from the really important job of delivering for the people of Wales.
“Labour politicians jockeying for the role of First Minister must not detract from this.”
Leader of the Welsh Liberal Democrats Jane Dodds MS said: “I’d like to personally thank the First Minister for his leadership and dedication to Wales throughout his five years in the role.
“Whether you disagree or not with the First Minister and his government’s decisions, it would be untrue to say that Mark has lacked any passion for his job.
“Throughout his time in office, he was provided consistent and clear leadership that has steered this country through some difficult times and for that we owe him a debt of gratitude.
“On a personal level, Mark has shown nothing but kindness and support to me throughout my time in the Senedd and for that I will forever be grateful.
“I wish him all the very best in his future endeavours.
“My message to the new First Minister is a simple one, set a new vision for Wales.
“We as a nation are facing multiple crises, in our NHS, our schools, our economy and with the cost of living.”
We desperately need fresh ideas and a real drive to radically change the future of our country for the better.”
