After 16 years as party leader and nine as premier, it's time for new blood, McGuinty told a surprised Liberal caucus that had been called into an emergency session.
"It’s time for renewal, it’s time for the next Liberal premier, it’s time for the next set of Liberal ideas to guide our province forward," he said.
"To that end, I spoke with the president of our party and asked that he convene a leadership convention at the earliest possible opportunity."
McGuinty will stay on as the MPP for Ottawa-South until the next election, but wouldn't comment on speculation a draft campaign has been in the works to persuade him to run for the leadership of the federal Liberals.
"I am not making any plans whatsoever beyond my duties here at Queen's Park," he told reporters. When journalists pointed out he hadn't ruled out a federal run, McGuinty joked they were spreading rumours.
"All I said is I don’t have any plans. That's all I said."
McGuinty's Liberals have been under fire for months for an out-of-control air ambulance service and faced a second contempt motion Monday for cancelling gas plants in Mississauga and Oakville at a cost of hundreds of millions of dollars to taxpayers.
However, the premier insisted it wasn't the controversy over the gas plants that prompted his sudden resignation, but rather cited his daughter's recent wedding as a time where he realized it was time for the party to renew itself.
"I thought it wasn't going to be that big of a deal, but I found it to be pretty emotional to be there with her and my family and my extended family, and it reinforced for me what those things in life are in terms of the most important: family, friends."
McGuinty blamed the fight over a public sector wage freeze for his second surprise —adjourning the legislature. He vowed the Liberals would try to negotiate zero-increase agreements with the unions — something the NDP has demanded — and would also use the break to negotiate with the Progressive Conservatives.
"They oppose our wage freeze plan, and that means we can’t make it the law, certainly as it stands at this point," said McGuinty.
"I met with the lieutenant-governor earlier today and asked that we prorogue the house so that we can pursue both discussions, both tracks, in a way that is free of the heightened rancour that has sadly, too frequently, characterized our legislature of late."
The government needs the wage freeze for about 481,000 public sector workers to trim the $14.4-billion deficit, and McGuinty said proroguing will give the government time to find out exactly what the Tories want to approve the plan.
"We’re going to continue to reach out to the Opposition to see if we can determine precisely what they would need by way of a legislative response to ensure that we could, through legislation, put in place the necessary wage freeze."
Names spoken of as potential leadership candidates include Housing Minister Kathleen Wynne, Finance Minister Dwight Duncan, former cabinet minister George Smitherman and Energy Minister Chris Bentley, who has been the focus of the opposition attacks and original contempt motion over the cancelled gas plants.
PC Leader Tim Hudak set aside the angry rhetoric of recent weeks to remember how McGuinty came over to shake his hand and welcome the newly-elected Tory to the legislature when he was first elected.
"I have never doubted his sincere commitment to the people in this great province of Ontario, and I thank him for his service," said Hudak.
However, the Tory leader said he doesn't want to see the business of the legislature, and the contempt charges over the gas plants, be brought to a standstill.
"I do hope the premier will reconsider — I strongly urge him to do so — to bring the legislature back in session," said Hudak.
NDP Leader Andrea Horwath also urged McGuinty to reconsider adjourning the legislature, saying there is too much important work still to be done, especially around the cancelled gas plants.
"I don’t believe prorogation nullifies the government’s responsibility, or the premier’s responsibility, for the fiasco at the Oakville and Mississauga power plants. That’s the bottom line," said Horwath.
"The timing is very curious certainly. The history books will write whether the premier was being strategic or not."
With the legislature now prorogued, the scheduled finance committee hearings into the gas plant cancellations and all other legislative business will be cancelled. There won't be any committee's either because the three parties have been unable to agree on their makeup under a minority government.
McGuinty said the timing of the recall of the legislature would have to wait until the Liberals had picked a new leader.
"I want my successor to make that decision," he said.
McGuinty told the caucus the Liberals have made some mistakes in government, but got the big things right in education, health and the environment.
"We’ve gone from Canada’s longest health-care wait times to its shortest, we’ve gone from dirty air to clean air and now we have the toughest drinking water standards anywhere," he said to a standing ovation from the Liberal caucus.
Prime Minister Stephen Harper praised McGuinty for his dedication to public service and his co-operation with the federal government.
"Our two governments have worked together to serve Ontarians, from implementing Canada's Economic Action Plan to keeping the auto industry in the province of Ontario," Harper said in a statement.
McGuinty was also praised by interim federal Liberal Leader Bob Rae, who was the NDP premier of Ontario when McGuinty was a rookie MPP.
"Mr. McGuinty has made Ontario a global leader in education by introducing full-day kindergarten and by making post-secondary education more accessible and affordable than ever before," Rae said in a statement.
Former Progressive Conservative leader John Tory, who lost the 2007 election to McGuinty, questioned the Liberal leaders' timing of his announcements.
"There will be plenty of time in the weeks and months ahead to judge his record in office...part of that record will be the decision to prorogue the legislature at this time when we need transparency and accountability more than ever," said Tory.
"While there may be practical reasons behind that decision, I don't think it will be seen as a good decision, short or long term."
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