Newfoundland and Labrador Premier Kathy Dunderdale is stepping down as premier and leader of the province’s Progressive Conservative Party.

Dunderdale said the province's Finance Minister Tom Marshall will be taking on the role of interim premier after her resignation officially takes effect on Friday.

"Ancient Hebrew scriptures teach us that there's a time for everything and a season for every activity under the heavens," Dunderdale said Wednesday morning, from the Confederation Building in St. John's.

"I have discovered that this also applies to public service. Just as you know when it's time to step up, you also know when it is time to step back, and that time for me is now."

Dunderdale, 61, told reporters that she was leaving the province in better shape than when she first took over as leader of the party in 2010. She cited a number of her proudest accomplishments including strengthening the economy, investing in offshore oil exploration and overseeing the Muskrat Falls hydroelectric project.

"Most importantly, on every scale, Newfoundlanders and Labradorians are better off today than when we started," she said.

Dunderdale did not answer reporters' questions following her announcement.

The news comes after backbencher Paul Lane crossed the floor to the Opposition Liberals on Monday. Lane cited Dunderdale's handling of blackouts earlier in January as one of the reasons for his departure.

A combination of bitterly cold temperatures, blizzard conditions and equipment malfunctions caused rolling blackouts in early January. Critics say Dunderdale failed to take control of the ordeal.

Dunderdale’s government has also seen a “steady decline” in polling numbers over the past six months, said James McLeod, a politics reporter for The Telegram in St. John’s.

“And the last month has really been disastrous for the premier,” he told CTV News Channel Wednesday. “There really was a sense within the political world in this province that it was a case of when, not if.”

Lane’s departure comes after MHA Tom Osborne left the Tory caucus in September 2012. Initially Osborne sat as an Independent, but later joined the Liberals.

Following the announcement, Marshall told reporters that it was solely Dunderdale's decision to resign. He praised Dunderdale for her "remarkable" leadership, and for breaking the "glass ceiling" by becoming the province's first female premier.

"She left as she served, with grace and dignity," he said. He added that he will serve as interim premier until the leadership race, but has no plans of running himself.

In a statement issued Wednesday afternoon, Prime Minister Stephen Harper thanked Dunderdale for her service to the province, and noted the frequent collaboration between the federal government and her government during her time as premier.

"I commend Ms. Dunderdale for her public service and wish her the very best in her future endeavours," Harper said.

Former Newfoundland and Labrador premier Danny Williams also issued a statement praising Dunderdale's contributions.

"Political life is never easy and anyone who steps up to the plate deserves to be acknowledged and appreciated for their commitment and work," he said in a statement. Williams also congratulated Marshall, recognizing him as a "dedicated and passionate Newfoundlander and Labradorian.

"He has earned tremendous respect throughout this province and has served in public life with a huge heart for social issues and a great mind for economic policy," Williams said.

Dunderdale took over as leader of the provincial Progressive Conservatives after Williams left politics in 2010. She was re-elected with a majority government in 2011. She will continue to represent the riding of Virginia Waters at the House of Assembly, Marshall said.