Tang immediately proceeded on leave, to give himself time to think about a run for the CE's job.
Executive Council convener Leung Chun-ying earlier stepped down from his post and declared his intention to run.
Sources close to Tang's camp said the timing of his resignation was planned. While on leave, Tang will meet with a wide spectrum of Hong Kong people and take in their views. He does not however intend to make any formal announcement of his candidacy until the Election Committee is formed on Dec 11.
Tang emailed civil service organizations on Wednesday morning, to advise them of his resignation.
The news was leaked and had already hit the electronic media, before he announced he would make a statement at lunch time.
Tang told reporters that he tendered his resignation to the Chief Executive in the morning.
He said he has been encouraged by many friends and other people to run for the CE's post.
"I know deep in my heart that this would be a great challenge for me. I need time and space to seriously think about this suggestion," he said.
"I need to consider how to respond to the wishes and aspirations of our people, and how to improve our livelihood and ensure that all sectors, particularly the underprivileged, will be able to truly share the fruits of economic success."
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