Ahern said at a surprise news conference he would step down May 6 after 11 years as Ireland's leader. He denied ever receiving a corrupt payment, but conceded that 18 months of growing criticism of his financial ethics had taken a toll on the effectiveness of his government.
"Never, in all the time I've served in public life, have I put my personal interests ahead of the public good," the 56-year-old Ahern said, flanked by senior Cabinet ministers during a 10-minute statement during which his voice frequently wavered with emotion.
He said Ireland faced important challenges, including an expected June referendum on the European Union's next treaty, and the government must "not be constantly deflected by the minutiae of my life, my lifestyle and my finances."
"I have never received a corrupt payment, and I've never done anything to dishonor any office I have held. ... I know in my heart of hearts I've done no wrong and wronged no one," he said.
Ahern said he also planned to resign May 6 as leader of Fianna Fail, Ireland's dominant political party, which he has led since 1994. He vowed to continue fighting the accusations against him, and predicted the corruption investigation would conclude "that I have not acted improperly in any way."
Ahern's terms in office have been marked by unprecedented economic success at home and peace in the neighboring British territory of Northern Ireland.
Tributes on his exceptional record of achievement flowed in, including from his most likely successor as both government and party leader, Deputy Prime Minister Brian Cowen. He praised Ahern as "a remarkable man who has achieved remarkable things for his country."
President Mary McAleese, Ireland's Belfast-born head of state, also lauded Ahern.
"His contributions to our thriving economy and to peace in Northern Ireland were hugely important and he deserves every credit for the work he has done," she said.
Former British Prime Minister Tony Blair, who built a close friendship with Ahern as they jointly oversaw several summits on Northern Ireland, said Ahern should be remembered for his crucial role in bringing about peace in Northern Ireland.
He said Ahern should also be remembered for "transforming relations between Britain and the Irish Republic, and for presiding over a sustained period of economic and social advance in Ireland."
But Ahern's hold on power has been steadily weakening since investigators discovered cash payments he secretly received from businessmen in the mid-1990s.
Ahern initially claimed to have received just two major payments from personal friends. But the investigation since has uncovered about a dozen undocumented cash deposits in 1994 to Ahern, who is due to resume testimony next month.
Ahern said he intended to remain in office until he delivers a speech April 30 to the joint houses of Congress in Washington. He said that speech would be "one of the proudest moments of my political career."
Cowen said he hoped Ireland would laud, not lampoon, Ahern in the coming days. He suggested that Ahern would be in line for a higher-profile job on the international stage.
"His application, his political judgment, his determination and his conciliatory manner are among the special characteristics that helped him to shape the Ireland we live in today," Cowen said.