Mr Yousaf had been facing two votes of no confidence later this week that he was not certain to win.
He said he had made the decision after spending the weekend reflecting on what was best for the SNP, the government and the country.
Speaking at his official Bute House residence in Edinburgh, Mr Yousaf admitted that he had "clearly underestimated" the hurt he had caused the Greens by ending the agreement in the manner that he did. His resignation comes just 13 months after Mr Yousaf won the contest to succeed Nicola Sturgeon as first minister and SNP leader.
"People that looked like me were not in positions of political influence let alone leading governments when I was younger. Mr Yousaf had written to the other party leaders asking them to find "common ground" ahead of the confidence votes, but was facing a battle to save his political future with his government no longer having a majority of seats in parliament.
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