Ms Palin made the surprise announcement from her home in suburban Wasilla on Friday morning.

She said she would step down July 26 but didn't announce her plans.

'It is my duty to always protect our great state,' Ms Palin said in a statement released by her office.

'With that in mind, my family and I determined that it is best to make a difference this summer, and I am willing to change things, so that this administration, with its positive agenda, its accomplishments, and its successful road to an incredible future, can continue without interruption and with great administrative and legislative success.'

Lt Gov Sean Parnell will be inaugurated at the governor's picnic in Fairbanks at the end of the month, Ms Palin spokesman Dave Murrow said.

Ms Palin was first elected in 2006 on a populist platform.

But her popularity has waned as she waged in partisan politics following her return from the presidential campaign.

Her term would have ended in 2010. -- AP