Dexter's resignation, which was submitted at the party's provincial executive meeting in Halifax, came a month after the NDP was knocked from power to third-party status in the last month's provincial election.
"It has been a privilege to serve New Democrats across Nova Scotia over the past 12 years," Dexter said in a statement.
"I also want to thank the Nova Scotians who believed in the NDP and gave us the opportunity to govern for the first time in the province's history. It has been an experience that I will carry with me always."
Dexter said he has no immediate plans for his future. Before spending 16 years in the legislature, he was the party's chair of election planning for a decade.
"For 26 years, I've been doing this," said Dexter in a soft tone. "I've been focused on getting to this point, and I'll think about (my future) some other time."
After winning the party leadership in 2001, Dexter led the Nova Scotia NDP to victory in 2009 and served as premier for four years.
Dexter said his party came into power during the financial crisis, when the province's forestry sector collapsed and the fishery was being devastated by low prices. He said his government looked beyond its four year mandate to build a stronger economy.
"As much as you'd like to wave a magic wand and create jobs, it actually doesn't happen that way," said Dexter after mentioning the national shipbuilding procurement as one accomplishment.
"I think that over the years to come, people will begin to understand the program, which was really a longer term program,"
The NDP won seven of the legislature's 51 seats in last month's election. Dexter also lost his own Halifax-area seat of Cole Harbour-Portland Valley.
Dexter said it will take some time to rebuild the party after October's crushing defeat.
"I think the opportunity for the party is every bit as great today as it has been in the past," he said. "The reality is they're going to have to take some time to bring things back together."
The party's president praised Dexter on Saturday for his years of service.
"He's been our leader for a long time and brought our party to historic heights," said David Wallbridge. "That's a significant accomplishment and it's a great public service that he has achieved."
Maureen MacDonald, a member of the legislature, is to be nominated as acting leader at an NDP provincial council meeting on Nov. 23 in Halifax.
Wallbridge said it's not yet known when a leadership convention would be held.
New Democrat MP Peter Stoffer offered gratitude to Dexter on Saturday for helping lead the province through the recession and for creating jobs.
"I for one was very proud of what Darrell and his team did," he said in an interview from his home in the Halifax area on Saturday. "Obviously there were some mistakes along the way but overall, I give him top marks for the way that he governed."
Stoffer said he wasn't ruling out running for the provincial leadership, but said he wanted to finish out his mandate as a member of Parliament.
Ontario NDP Leader Andrea Horwath said in a statement Saturday that Dexter should take pride in his accomplishments and wished him well in the future.
"He was thoughtful and genuine in a political world that often lacks both, and I appreciate the time he always found to offer advice and insights," she said.
Nova Scotia Liberal Premier Stephen McNeil said in a news release that although they had their differences, he always admired Dexter for his commitment to public service.
Also on HuffPost