She also said she would stand down as chancellor once the current legislative term ends in 2021.
Angela Merkel finally took action to stem the growing panic within her coalition government on Monday when she announced she would step down as leader of her Christian Democrat party (CDU) in December.
The CDU is expected to select its new chair in December at a party conference in the northern German city of Hamburg.
With her authority badly weakened by last September's inconclusive general election and ongoing squabbles in her unhappy coalition, the chancellor has faced mounting calls to prepare Germany for the post-Merkel era.
The Social Democrats' weak performance in regional elections this year in Hesse and Bavaria has added pressure on their national leadership to force Merkel into more concessions.
Taxi for Angela Merkel?
During that momentous upheaval, Merkel, who holds a doctorate in quantum chemistry and was working in a lab, joined a pro-democracy group that would merge with the Christian Democrats of chancellor Helmut Kohl.
This position has allowed the so-called grand coalition which presently rules Germany, an alliance between the main centre-right CDU and main centre-left SPD, from parties which should, in theory, be opposed on government but are united in keeping other voices out of power.
The Social Democrats only reluctantly entered Merkel's fourth-term national government in March, and many are dismayed by what has happened since. In the next Bundestag election in 2021, I will not run again as Chancellor.
Merkel has chaired the CDU for 18 years and has until now insisted that the presidency of the party went hand in hand with the chancellorship post.
Such results would make various regional coalitions possible, with the Greens potentially joining parties to their right or left or even, if their results are exceptionally good, having a chance to make their local leader Tarek Al-Wazir - now Bouffier's deputy - the state governor.
Being able to keep Bouffier, a deputy CDU leader, as governor will stabilize Merkel in the short term, he said.
News agency dpa cited unidentified party sources as saying Merkel told an ongoing CDU leadership meeting that she's prepared to step down as party leader but intends to remain chancellor.
Her major policy shifts have reflected the wishes of a changing society - among them phasing out nuclear power after the 2011 Fukushima disaster - and shifted her CDU firmly to the political centre.
Merkel's preferred heir, Annegret Kramp-Karrenbauer, wants to continue in her tradition of moderation and big-tent centrism.
That decision has led to lasting tensions in her conservative Union bloc, particularly with the CDU's Bavaria-only sister party, the CSU, and helped the anti-immigrant Alternative for Germany party gain support. She plans to run for the party's top job.
The AfD party has representatives in all 16 states in Germany.