"I am stepping down as prime minister," he said in a television broadcast. "I hope the government's resignation will satisfy the people who came out in the streets."
More than 20,000 people rallied in Bucharest Tuesday demanding Romania's prime minister resign over a deadly nightclub fire that claimed 32 lives.
Romanian police arrest club owners after fire kills 31
Demonstrators gathered in Bucharest's Victory Square, the seat of government, calling for Prime Minister Victor Ponta's resignation and that of his interior minister, Gabriel Oprea.
The marchers chanted "Ponta resign" and "killers", and some waved the national flag with holes in it -- a symbol of the popular revolution 25 years ago that toppled dictator Nicolae Ceausescu.
President Klaus Iohannis, who had earlier paid tribute to two heroes in the blaze and demanded reforms to prevent a recurrence of the tragedy, praised the rally.
"I am impressed by this evening's demonstrations," the conservative head of state said on his Facebook page. The country's political leaders, he said, "cannot ignore this feeling of revolt."
Viorel Anastasoaie, a demonstrator aged in his thirties, said the rally was "a gesture of solidarity" with the victims of the blaze "and a sign of protest against the government, against the district mayor, against the system which enabled a tragedy of this kind to happen."
Ponta, 43, has been under growing pressure to quit after he went on trial in September facing charges of fraud, tax evasion and money laundering.
The Social Democrat is the first Romanian head of government to stand trial while still in office.
The charges date back to 2007-2011, when Ponta was working as a lawyer. He became prime minister in 2012.
Earlier, mourners paid tribute to two men who sacrificed themselves in the fire which engulfed the Communist-era basement club last Friday.
The toll of 32 dead and nearly 200 injured would have been deadlier had Claudiu Petre, a physicist by training, and drummer Adrian Rugina not been at the Colectiv disco when an illegal pyrotechnics display went horribly awry.
The pair went several times into the burning club to rescue trapped revellers, only to die themselves.
Witnesses said a fireworks display triggered the blaze at the Colectiv, which was located in a former shoe factory. The inferno sparked a deadly stampede.
'Safety rules ignored' in Romania nightclub blaze
Elders in the Orthodox church criticised the youngsters for listening to "Satanist" music at the concert, which was held on the night before Halloween.
The accusations sparked a backlash against the ecclesiastical authorities, especially against Patriarch Daniel, head of the Romanian Orthodox Church, who has maintained a studied silence on the tragedy.
On Monday, Petre and Rugina were posthumously decorated by Iohannis for "their courage and altruism and for saving lives at the cost of supreme sacrifice."
"Their time is not over as heroes never die," Iohannis said.
In remarks on Sunday, Iohannis also called for society to face up to the need for root-and-branch reform.
"We should no longer tolerate government incompetence, institutional inefficiency, and we cannot let corruption spread to the point that it kills people," he said.
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