Dunlop, who was first elected in 1999 to represent the longtime Conservative stronghold north of Barrie, announced Wednesday he would step down on Aug. 1.
Dunlop was one of the most vocal opponents to Brown in the PC caucus during the party's leadership race, openly asking: "Who does this guy think he is, coming down from Ottawa to take over our caucus?"
But Dunlop admitted in his resignation speech that he'd changed his thinking.
"I said some things that were completely wrong, and I was wrong to say them," he said. "I have watched Patrick Brown grow in the last nine or 10 months ... coming into our caucus and being accepted immediately as leader."
Brown shrugged off Dunlop's earlier criticism.
"I learned over the years that there's no script for Garfield," Brown said to laughs from the many Dunlop supporters gathered in the community of Coldwater for the announcement. "He's sincere, he's authentic and he's a gentleman."
Brown resigned his seat in the House of Commons as MP in the neighbouring riding of Barrie after he won the PC leadership in June, and said he was "humbled and excited" that Dunlop offered to quit so he could seek a provincial seat.
"That he believed so strongly in myself and our party, that he approached me with an offer to step aside, is just incredible and a tremendous honour," said Brown. "Today marks another exciting chapter for our party."
Deputy Premier Deb Matthews said Premier Kathleen Wynne would not call the byelection in Simcoe North until after the Oct. 19 federal election to avoid confusing voters with duplicate campaigns.
Matthews pointed out that Dunlop had criticized Brown for opposing an update to Ontario's sex-education curriculum, and said his resignation "shows there's no room left for moderates in Patrick Brown's extreme-right PC party."
Dunlop was comfortable serving under former PC leaders Mike Harris and Tim Hudak, "but it's clear that Brown's extreme right-wing ideology was a step too far," added Matthews. "Dunlop is quitting because the PC party under Patrick Brown is too radical, too out of touch and badly divided."
Brown thanked Dunlop for 35 years of public service at the municipal and provincial level, and said the former PC education critic would now be the "chief education adviser" to the party.
"Garfield has proven himself to be a tireless advocate for parents and students and has spent years building strong relationships with the education community," he said.
Dunlop's move eases concerns of some Tories who feared Brown would face the same embarrassing problems getting a seat in the legislature that former PC leader John Tory had after he lost to Wynne in a Toronto riding in 2007 and then lost a byelection in Peterborough.
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