He said only that it was the "right time" to get out of politics, Reuters reports.
The decision to resign was "the hardest decision I've ever made," Key said, the BBC reports. "I don't know what I'll do next."
In his resignation announcement, Key said his political career had came at some "sacrifice" to his family, and mentioned missing events in his wife and children's lives.
"I've given everything I could for this job, a job that I cherish and a country that I love," he said. "Simply put it has been for me the most remarkable, satisfying and exciting time of my life. But despite the amazing career I have had in politics, I have never seen myself as a career politician. I have certainly never wanted my success in politics to be measured by how long I spent in Parliament."
His party, the National Party, "is in great shape," Key pointed out, and he said he "absolutely" believes they will win the next election.
"But I do not believe that, if you asked me if I was committed to serving out a fourth term, that I could look the public in the eye and say yes," he said.
"And more than anything else in my time here, I have tried to be straight and true with New Zealanders. I also believe that leadership change, for the right reasons and handled well, is good for a political party. For all these reasons, I today told my Cabinet and caucus colleagues of my decision to step down as Leader of the National Party and as Prime Minister."
Key told reporters he would stay in parliament long enough to avoid a by-election for his seat.
