"Secondly, this fourth term is my last as German chancellor".
But another three years in the parliamentary saddle now seems unlikely as the centre-right CDU and its centre-left coalition partner, the gravely wounded Social Democratic Party (SPD), lose popularity at dire rates at the national and regional levels. She had won four consecutive terms.
Merkel's predecessor, Gerhard Schröder, stepped down as party leader in February 2004 but remained chancellor until November 2005.
Here's a look at those who might seek to take a first step toward the chancellorship when the CDU picks its next leader. Capturing only 33 per cent of the vote, Ms. Merkel's CDU spent nearly six months trying to cobble together a coalition, eventually resorting to the vastly diminished SPD to form a government.
Merkel's rumored successor as of now is CDU secretary general, Annegret Kramp-Karrenbauer, who has already announced her candidacy.
The announcement comes after her party's vote dropped 10 percent during an election on Tuesday in the German state of Hesse.
AfD leader Joerg Meuthen hailed Merkel's eventual departure as "good news".
But despite her assurance that she would step down in 2021, some doubt she could even make it to the end of her term.
The instability has further eroded the credibility of the conservatives and the SPD in the eyes of German voters, who are increasingly turning to smaller parties on the right and on the left.
Age: 45Role: State premier of Schleswig-Holstein Guenther emerged from relative obscurity past year to take Germany's northernmost state in a valuable electoral boost to Merkel.
German Chancellor Angela Merkel, center and other German officials sit prior to an ecumenical mass at the Berlin Cathedral during the German Unification Day public festival in Berlin, Germany, on October 3, 2018.
The euro fell as reports of Ms Merkel's decision emerged.
At the same time, she said the CDU will be able "to prepare for the time after me".
"Yes, this is a bit of a risk", she said. The chancellor threw her weight behind her friend in Hesse and visited him four times on the campaign trail in recent weeks.
Although the CDU would then select a new leader, Dr Merkel is expected to attempt to stay on as Chancellor - Germany's Prime Minister equivalent position - until the next national elections in 2021.
Two prominent candidates immediately threw their hats in the ring for the CDU leadership.
The Frankfurter Allgemeine Zeitung said on Sunday it would be "a mistake" for Merkel to cling to power.
Often hailed as the world's most powerful woman and Europe's de facto leader, a weakened Merkel has faced growing calls to spell out her succession plans after 13 years in power.
She swung her conservatives behind bailouts for Greece and other struggling eurozone nations, striking a balance between calls for a strict approach at home and more generosity overseas.
Merkel's power has been on the wane since her fateful 2015 decision to keep Germany's borders open, ultimately allowing in more than one million migrants.
She aims to give her conservative Christian Democratic Union party the opportunity for renewal while keeping the reins of government.