The tough-guy premier resigned in November after his candidate was beaten by a Moscow-friendly general in presidential elections, sparking renewed political instability in the EU's poorest country, where no other party can currently form a government without the support of Borisov's conservative GERB party.
"I will not propose to form a new government and I hand back the mandate," Borisov told President Rosen Plevneliev at a ceremony in Sofia.
Under Bulgaria's constitution, the outgoing president will hand another mandate next Thursday to the second largest party, Socialist BSP, and then pick a third party for a final attempt to avert a snap vote.
"The road to early elections is clear," analyst Dimitar Ganev said, adding that Borisov's resignation was a "tactical move" meant to "keep GERB's leading position."
Bulgaria's president-elect, the Socialist-backed former air force general Rumen Radev, will take office only in January so the outgoing Plevneliev will have to appoint a caretaker administration until then.
This will be Bulgaria's fifth cabinet in less than four years.
When Radev takes office on January 22 he will dissolve the current parliament and set a date for the snap vote, expected to be held in late March at the earliest.
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