The German political landscape had already changed previous year after the general elections in September when the oh-so-stable Germany saw the far-right party AfD enter the national parliament, the Bundestag, and witnessed coalition talks that failed after four weeks of negotiations, then had to wait months for a new government to form.
Known by some as the "Iron Lady" of German politics, Merkel is increasingly beleaguered and even her most faithful supporters are not convinced she will be able to see out her full electoral term due to end in 2021.
Over the last two weeks, voters in the states of Hesse and Bavaria also punished her party and coalition allies CSU and SPD in two separate regional elections.
Ms Merkel's decision to step down echoes that of her predecessor, Gerhard Schroeder, who quit as leader of his centre-left Social Democrats in 2004 as his government struggled, but remained chancellor.
She has led Germany as chancellor since 2005 - and wants to stay in that post.
An election Sunday in the central state of Hesse saw both the CDU and the Social Democrats lose significant ground, while there were gains for both the Greens and the far-right Alternative for Germany.
Volker Bouffier, lead candidate for the German Christian Democrats (CDU), fills in his ballot paper in Hesse state elections on October 28, 2018 in Giessen, Germany.
Monday's news came as a surprise to CDU party officials, who had expected Merkel to seek re-election as chairwoman at a party congress in Hamburg in early December.
Railing against the newcomers, the anti-immigrant AfD is now the biggest opposition party in the Bundestag, and after a strong showing in Hesse on Sunday now has seats in all of Germany's state parliaments. The majority no longer trusts Angela Merkel - after 13 years in office - to steer the process of renewal.
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Merkel's sinking popularity began in 2015 when her "open door policy" on immigration permitted over 1 million migrants and refugees, predominantly from the Islamic world, to enter the country.
Merkel has always made it clear that she would not relinquish that tool. Last month she lost her key parliamentary henchman, Volker Kauder when he was ousted by disgruntled coalition lawmakers.
"I believe we need to turn a new page", Ms Merkel said.
She added that she would not stand in Germany's next elections nor seek to renew her mandate as chancellor when her fourth term ends in 2021.
Merkel now governs Germany in a "grand coalition" of what traditionally have been the country's biggest parties - the CDU, Bavaria's CSU, and the Social Democrats. "Any conceivable coalition in Berlin would still be dominated by the mainstream parties CDU/CSU, SPD, Greens and the smaller Liberals".
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.
What does Ms. Merkel's decision to give up the party leadership mean?
Just 38 years old, right-winger Jens Spahn is seen by many as the "anti-Merkel".
The second is Annegret Kramp-Karrenbauer, nominated by Ms. Merkel previous year to become general secretary of the CDU, a role spanning administrator and spokesperson.