The MSP for North East Fife led his party to a disappointing result in the 2021 Holyrood election, losing one seat overall and in turn losing their right to a question at First Minister’s Questions and a place on key parliamentary committees.
Mr Rennie was elected as Liberal Democrat leader in 2011 following the resignation of former leader Tavish Scott.
During his time leading his party, the Liberal Democrats went from 16 seats in Holyrood to just four, with Alex Cole-Hamilton, Liam McArthur, and Beatrice Wishart potential successors in the Scottish Parliament.
In a statement announcing his resignation, Mr Rennie said he will continue to serve as an MSP for the rest of the parliamentary campaign.
He also criticised the “divisive debates” which the MSP said have “dominated” Scotland in recent years, adding that the country deserves a “strong progressive alternative to the twin nationalisms” embodied by the SNP and the Scottish Conservatives.
Stating it was time for a “fresh face” to lead the Liberal Democrats, he said he would support any future leader.
Mr Rennie said: “After eleven elections and referendums over ten years and a global pandemic, I have decided to stand aside as Leader of the Scottish Liberal Democrats.
“I have always believed that politics can be a vehicle to tackle the big issues and transform the lives of the people we are elected to serve.
“Liberal Democrats stand for an open, united and outward looking country. We are on the side of those who want a better future for themselves and their families but who also want the same for others, from the people living next door to those in countries around the world that often lack the advantages that we enjoy here.
“Standing up for Scotland’s place in the UK and in Europe is second nature to us. The divisive debates that have dominated our country over these issues have inflicted damage within families, communities and the economy.
“Scotland deserves a strong progressive alternative to the twin nationalisms represented by the SNP and Conservatives. They polarise and divide Scotland when we should unite to overcome the enormous challenges we face, from Covid-19 to climate change to the inequalities that continue to stain our society.
“Over the last decade there have been both gains and losses along the way, but I have enjoyed every effort. I love a good campaign.
“But it is time for a fresh face to lead our party forward. The new Leader will have my full support in writing the next bright chapter of the Scottish Liberal Democrats' story.”
The search for a new leader of the party will now begin, but with only three MSPs and four Scottish MPs, the choices will be narrow.
Alistair Carmichael, the longest serving MP of the group, has served as deputy leader of the Scottish Liberal Democrats since 2012 and may fancy the top job.
Other MPs include Edinburgh West’s Christine Jardine, Caithness, Sutherland and Easter Ross’ Jamie Stone, or North East Fife’s Wendy Chamberlain.