According to a government official, Greek Prime Minister Alexis Tsipras submited his resignation later Thursday. Tsipras resigned to pave the way for early elections on September 20.
Elected in January, Tsipras made a televised state address on Thursday at 1700 GMT.
"I will hand in my resignation and now the people will have to decide who will lead." Tsipras said.
As Greece was able to pay its 3.2 billion euro debt to the European Central Bank using money from the first instalment of its new bailout, Greece moved another step away from the financial turmoil.
However, during the bailout talks Tsipras lost his parliamentary majority as hardliners in an anti-austerity Syriza party continue to oppose the bailout conditions agreed with international creditors.
It is currently blunt whether a snap election would allow Tsipras to strengthen his popularity with Greek voters before the bailout program begins to show its pressure. Some believe that snap elections might allow him to return to power with a stronger position.
Tsipras is very popular among his supporters for standing up to its international creditors, the eurozone and the IMF.
Greece has a complex constitution that has restrictions for holding elections less than 12 months after the previous one, meaning the president must ask for opinions of other major parties to see if they can form a government. However, this option is considered to be very unlikely.