Steve Ashton, minister of transportation, said he met with Premier Greg Selinger Monday morning to give him his resignation letter in person. He then announced his decision on Twitter.
His official campaign launch is to come Tuesday.
Ashton said the NDP needs to reconnect with voters after a "political crisis" that has seen five other cabinet ministers resign and publicly question Selinger's leadership amid disastrous approval numbers.
The NDP can recover from anger following a provincial sales tax hike last year and go on to win the next election, he said.
"We're in this critical situation, as a party and a government, but the fundamentals are good," Ashton said in an interview as he packed boxes in his legislature office.
"We can rebound and we can actually win the next election. I wouldn't be doing this if I didn't believe that was the case."
A spokesman for Selinger said the premier would not be commenting on Ashton's departure and wouldn't say whether a cabinet shuffle was in the offing.
"When ministers pick up responsibilities of Minister Ashton's portfolios we will make an announcement at that time," Paul McKie said in an email.
"We will issue (a) statement when the decision is made. Anything else would be speculative."
Ashton joins former cabinet colleague Theresa Oswald — who was one of the "rebel five" who resigned to protest Selinger's leadership — in challenging the premier for the top job.
Oswald launched her leadership campaign over the weekend. She declined an interview request on Ashton's candidacy but told a Winnipeg radio station that she welcomes him to the race.
"It's not unexpected. I think Mr. Ashton has been interested in a leadership role for years," Oswald told CJOB. "He and I have been colleagues for years and it will be a spirited an lively race, I have no doubt."
Selinger prompted the leadership race after coming under fire for the party's sagging fortunes following the provincial sales tax hike.
Selinger, who has led the NDP since 2009, has said he will stay on as premier and fight to keep his job at a party convention March 8.
Ashton ran unsuccessfully against Selinger for the leadership in 2009 when then-premier Gary Doer resigned to become Canada's ambassador to the United States. Ashton didn't have the backing of any cabinet colleagues, but did have the support of some key labour unions.
After running a campaign advocating the party return to its social justice and labour roots, Ashton garnered one-third of the vote.
Ashton wouldn't say who supports him now or whether he would promise to roll back the tax hike.
He said he will put forward a positive platform with some new ideas that will differentiate him from Selinger.
"It's not just about a new leader," he said. "It's about the ideas. It's about the vision."
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