"The Prime Minister said he tried his utmost effort to solve the crisis in his country and he is resigning now to be part of a solution to it", Fana reported.
"Unrest and a political crisis have led to the loss of lives and displacement of many", Hailemariam said in a televised address to the nation.
Ethiopian Prime Minister Hailemariam Desalegn on Thursday resigned his position amid anti-government protests. The violence damaged the country's reputation as an investment destination and posed one of the biggest challenges to the ruling coalition since it came to power in the early 1990s.
But although Mr Hailemariam's departure closely followed the enforced resignations of South Africa's Jacob Zumba and Zimbabwe's Robert Mugabe, few observers saw it in the same mould.
"He also stated he will continue to serve as a Prime Minister until the power transition is completed", it said.
Ethiopia has been rocked by months of protests demanding wider freedoms that have left hundreds dead and tens of thousands detained.
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The resignation of Hailemariam, in power since 2012, comes amid protracted anti-government protests and follows a nationwide state of emergency past year.
Protests erupted in 2016 over political and ethnic marginalization of the Amhara and Oromia people, as well as land seizures and human rights abuses. "I see my resignation as vital in the bid to carry out reforms that would lead to sustainable peace and democracy".
Both the EPRDF and his party, the Southern Ethiopian People's Democratic Movement, have accepted his resignation, and he hoped parliament would accept it, Hailemariam added.
Mr Hailemariam, a trained engineer, took office following the death of Meles Zenawi who had ruled since 1991.
The disturbances have led to deep divisions in the governing Ethiopian People's Revolutionary Democratic Front (EPRDF) coalition, says Mary Harper, Africa editor for the BBC World Service.