His son Namal Rajapaksa, also a lawmaker, said his father would make a special statement at 0830 GMT "He just signed the resignation letter in front of party members," Shehan Semasinghe, a legislator from Rajapaksa's party, told Reuters.
Rajapakse ends standoff as Sri Lanka risked shutdown
The announcement came shortly after the Supreme Court banned Rajapakse, 73, and his purported government from exercising the powers of the office they claimed since October.
A day earlier, the Supreme Court opened the way for potential impeachment proceedings against President Maithripala Sirisena ruling that he broke the law by dissolving parliament last month.
A seven-judge bench unanimously agreed that Sirisena violated the constitution when he dissolved parliament last month to prevent Rajapakse suffering a humiliating defeat on the floor of the House.
Sirisena had also called a snap election nearly two years ahead of schedule. That was also cancelled by the courts.
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