Newstalk 1010 has learned that the Tory head told his caucus that for the good of the party, and the good of his family, he'll give up his leadership role with the Progressive Conservatives.
Hudak will stay on as MPP for the riding of Niagara West-Glanbrook.
The Tory leader sent a two-page memo to caucus in the late afternoon, first pumping them up and then making his announcement.
In the note, Hudak reveals the PC caucus is divided on how to move forward, some wanting a longer transition process until they pick a new leader.
Hudak says he has decided to step down at the start of the legislative session so the party could get an interim leader in placeas it begins.
Newstalk 1010 political analyst and Toronto Sun editor Adrienne Batra says the news doesn't surprise her.
"It's not uncommon,” she said. “ When a leader loses an election, it gets to the point where they need to resign, so it's not out of the ordinary."
Several names have been floated as potential candidates to replace Hudak. Fellow MPP's Chirstine Elliott and Lisa MacLeod as well as federal Conservatives Tony Clement and Lisa Raitt are all rumoured to have been interested in the seat.