Canada?s Prime Minister Justin Trudeau announced his resignation on Monday, saying he will leave office as soon as the ruling Liberal party chooses a new leader after months of slumping polls and internal division.

?I intend to resign as party leader, as prime minister, after the party selects its next leader,? Trudeau, who has been in power since 2015, told reporters in Ottawa following a protracted political crisis that saw top Liberal allies urge him to quit.

It was not immediately clear how long Trudeau will remain in office as a caretaker premier.

He said the Liberal leadership race will be ?a robust, nationwide competitive process.?

That means Trudeau will continue to lead Canada when incoming US president Donald Trump takes office this month and will be tasked with leading the country?s initial response to the new US administration, including a possible trade war.

Trump has vowed to impose 25 percent on all Canadian imports, which could prove devastating to the Canadian economy, and Trudeau has vowed to retaliate.

Trudeau?s support within the Liberal party had been teetering through much of last year but plunged to new depths following the surprise resignation in December of his former finance minister and deputy prime minister Chrystia Freeland.

In a scathing resignation letter, Freeland accused Trudeau of focusing on political gimmicks to appease voters, including a costly Christmas tax holiday, instead of steadying Canada?s finances ahead of Trump?s promised tariffs.

Canadian media have tipped Freeland as a possible contender to taker over the Liberal Party along with the former Bank of England governor Mark Carney, a Canadian who also previously led the Bank of Canada.

Lori Turnbull, a political science professor at Dalhousie University, said traditionally a Liberal leadership race would take four to six months but this time ?they?ve got to be quicker than that.?

?If they don?t have a new leader for the next election, then there?s no point,? she told AFP.

Trudeau?s Liberals are trailing badly in the polls to the opposition Conservatives and narrowly survived three non-confidence votes in parliament late last year.

His minority government had been held up by a deal with the left-wing New Democratic Party but in December the NDP said they would vote to topple Trudeau at the next opportunity.

Trudeau confirmed that he had received permission from Canada?s governor general to suspend all parliamentary business until March 24.

That could could give the Liberals time to choose a new leader while restricting the opposition chances to bring a vote of non-confidence. (AFP)

Update news