Alberta Premier Ed Stelmach abruptly announced Tuesday he will not run in the next provincial election, stating he is "not prepared to serve another full term as premier."

Stelmach made the announcement at a morning press conference in Edmonton, saying he planned to officially tell the president of Alberta's Progressive Conservative Party shortly.

He said he would serve as premier until he formally submits a letter of resignation.

"There is no doubt that my decision today will come as a shock to many," he said.

Stelmach was first elected as a Member of the Legislative Assembly office in 1993, serving in the cabinets of Ralph Klein. He won party the leadership when Klein resigned in 2006.

He led the Tories to a large majority government in the 2008 general election, winning 72 of a possible 83 seats, but has been hammered over his handling of the province's finances during the recession.

Stelmach was forced to draw on Alberta's savings, accumulated through years of multibillion-dollar surpluses, which put the province into the red. He also opted to run large deficits rather than cut government programs, defying the wishes of some of his conservative colleagues.

A decision in 2007 to boost royalty rates that the province charges to oil and gas companies was also unpopular. The move came just before oil and gas prices plummeted with the 2008 recession, which cost the industry jobs many fear will never return.

Political strategist Rod Love, who served as Klein's chief of staff, said it was clear to many observers in the province that amid the growing discontent with Stelmach's leadership, something had to give.

"I don't think it's that surprising," Love told CTV's Power Play Tuesday evening. "It's well known that there's a lot of discontent in the caucus, in the cabinet, amongst the party members, and the public in general."

Stelmach had targeted March 2012 for the next election, but his successor is under no obligation to follow that timeline. The next election must be held before March 2013.

Stelmach said he came to his decision after speaking with his family and members of his caucus. Stelmach had been meeting with members of his caucus and asking them to make a commitment to stay in office for at least five years.

"As I have been having these discussions I have also been reflecting on my own commitment to serve beyond the next election," he said.

He said he came to the conclusion that 25 years of public service was enough.

CTV's Alberta Bureau Chief Janet Dirks says Stelmach has been facing pressure over his leadership from the province's other conservative party, the Wildrose Alliance Party.

"There have always been mutterings that Stelmach didn't have the necessary charisma to do the job. People would compare him to Ralph Klein, who was so famously charismatic and had such away with the media, and such a way with the common man and woman," Dirks told CTV News Channel.

The Wildrose Alliance is a growing, yet still small, force in the province under leader Danielle Smith, but has managed to poach former Conservatives. Not long after Paul Hinman won a Sept. 2009 by-election in Calgary for the party, three former Tories -- Rob Anderson, Heather Forsyth and Guy Boutilier -- defected.

Political strategist Geoff Norquay, a policy specialist at Earnscliffe Strategy Group, said the short-term challenge for the Tories will be to stop the bleeding.

"It's been pretty clear for some time in Alberta that a lot of PCs in the province were on strike. They'd kind of wandered away from the party, they were no longer engaged, they were no longer there for the party," Norquay told Power Play. "So I think that as we see the leadership go forward…their big task will be to reenergize that party and to bring the faithful back to the fold."

Stelmach warns of ‘U.S.-style' campaign attacks

During the press conference, Stelmach suggested the next election was going to feature more "U.S.-style" personal attacks.

He said there was a danger that an "extreme right" party could disguise itself as a moderate party by focusing the campaign on attacks against him personally.

"This type of U.S.-style wedge politics is coming into Canada, and it comes at our peril," he said.

Not long after Stelmach made his comments, Smith said she was surprised by his predictions about the tone of an upcoming campaign.

"I'm not sure exactly what he's referring to," Smith said. "If you look at the way we've conducted ourselves as a party, we have stayed completely focused on the issues and we intend to continue staying focused on the issues.

"That's what Albertans want to see. They don't want to see a province that's going to get pulled into the politics of personal destruction. That's what we've seen on the PC side."

Love said it will become clear, as the leadership race unfolds, whether the Tories can stop the "flood-tide" to the Wildrose ranks over discontent with the premier.

"The Wildrose Alliance position themselves, I think correctly, as a moderate, centre-right party," Love said. "And the question is who best now represents the mainstream in Alberta, and that's what's going to be sorted out in the next 12 months."

Stelmach is Canada's highest-paid premier, earning just over $201,000 in 2011. While a lively leadership race is possible, Norquay said, the front-runner for the job is Stelmach's finance minister, Ted Morton. Morton had run against Stelmach for the party leadership when Klein stepped down, and had not ruled out another go at the job.

On Tuesday, Stelmach also announced that the provincial budget would not be balanced until 2013, one year later than expected.

With files from The Canadian Press