The coalition, which controls every seat in Ethiopia's 547-member parliament, accepted the prime minister's resignation and is scheduled to hold a session next month.
Ethiopian Prime Minister Hailemariam Desalegn has submitted a letter of resignation, the state-affiliated Fana Broadcasting Corporate station reported on Thursday.
Desalegn, 52, took over the position of prime minister soon after the death of late Prime Minister Meles Zenawi in August 2012.
Hundreds of people have died in violence sparked in 2015 and 2016 in the country's two most populous regions - Oromiya and Amhara.
The attacks and arrests by security forces were condemned by global agencies and partners resulting in measures instituted by the government to address the issues which are still lingering.
The prime minister had pushed for even more releases, said a regional analyst familiar with Ethiopian politics.
Ethiopian People's Revolutionary Democratic party has been ruling the country for the last quarter of a century after the regime of Colonel Mengistu Hailemariam, who is in exile in Zimbabwe.
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It fought Iran for most of the 1980s and invaded Kuwait in 1990, leading to defeat by a USA -led coalition and more than a decade of sanctions.
Desalegn's resignation brings into sharp focus the uncertainties over how the ruling coalition will now address issues related to federalism, social justice, land reform, equitable economic development, besides opening up political dialogue and creating national consensus.
Internal challenges also continued to mount in 2017, as clashes between ethnic Somalis and Oromos, who together constitute more than 40% of the country's over 100-million-population, intensified.
The unrest led to a months-long state of emergency that has since been lifted.
The government has released more than 6,000 prisoners so far.
Befekadu Hailu, an Ethiopian writer and activist, echoed those sentiments, explaining that the state's earlier tactics - including the violent crackdown and the promise to release all political prisoners - did not work in stemming the unrest.
Desalegn confirmed that he will remain as prime minister but only in a caretaker capacity.